Investopedia explains 'Nearby Month'
In a normal futures market that is in contango, nearby months are less expensive than deferred months. In backwardation, futures market conditions are such that the nearby month is more expensive than deferred months. The nearby month is a key component of many options and futures trading strategies, including the calendar spread and reverse calendar spread. These strategies seek to profit from differences in pricing between the nearby month and a more distant month for the same underlying market.
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