Furthest Out

AAA

DEFINITION of 'Furthest Out'

Mainly pertaining to options and futures, this is the options or futures contract that has the most distant deliverly month or expiration. The furthest out contract is the contract with the quoted expiry the furthest away, as it relates to time. While this furthest out contract differs from security to security, it is not uncommon for it to span more than a calendar year.

INVESTOPEDIA EXPLAINS 'Furthest Out'

Many options and futures traders also refer to a furthest out contract as the "back month." Typically these back month contracts will be very illiquid, as most traders prefer to trade in "front month" or closest to delivery contracts due to their liquidity in the options and futures markets. Illiquidity in such markets can lead to bid and ask spreads being quite wide, causing trades to become even more few and far between.

RELATED TERMS
  1. Back Months

    The available futures contracts for a particular commodity that ...
  2. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  3. Options Contract

    A contract that allows the holder to buy or sell an underlying ...
  4. Delivery Month

    A key characteristic of a futures contract that designates when ...
  5. Nearby Month

    In the context of options and futures, the month closest to delivery ...
  6. Multibank Holding Company

    A company that owns or controls two or more banks. Mutlibank ...
Related Articles
  1. Rolling LEAP Options
    Options & Futures

    Rolling LEAP Options

  2. Getting Acquainted With Options Trading
    Options & Futures

    Getting Acquainted With Options Trading

  3. The Importance Of Time Value In Options ...
    Options & Futures

    The Importance Of Time Value In Options ...

  4. Options Trading Strategies: Understanding ...
    Options & Futures

    Options Trading Strategies: Understanding ...

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center