When trading futures contracts, most traders pick the contracts with the highest volume/liquidity. Typically, this is the contract closest to expiring, also known as the front-month contract. These contracts can be easily identified by looking at the symbol for a given asset. To find the correct symbol, you start with the product symbol. Next, you add the Contract Month Code. Finally, you add the last digit or last two digits (depending on your platform) of the current year.
Let’s use the E-Mini S&P500 as an example. At the time of writing, the contract with the nearest expiration date is in March 2023. Using the above method, we can conclude that the symbol for the front-month contract is ESH3.
If we look at the quotes for E-Mini S&P 500, we can confirm that the ESH3 contract is the one with the highest volume:
(Data taken on February 16, 2023.)
To learn more about front-month contracts, please check out the full guide on our blog.