Listen to a Business English Dialogue About Far month
Faith: Hi Andrew, have you heard about the term “far month” in business and finance?
Andrew: No, I haven’t. What does it mean?
Faith: The far month refers to the futures contract with the longest maturity date, typically further into the future compared to near-month or next-month contracts.
Andrew: Oh, I see. So, it’s like an agreement to buy or sell a financial instrument at a specified price on a future date, but further out?
Faith: Exactly. Far-month contracts are often used by investors and traders to hedge against long-term price movements or to speculate on future market trends.
Andrew: Are there any advantages to trading far-month contracts compared to near-month contracts?
Faith: Well, far-month contracts can provide more time for price movements to play out, potentially offering greater profit opportunities or risk management capabilities.
Andrew: That makes sense. So, it’s a way for traders to take a longer-term view on the market?
Faith: Yes, precisely. It allows traders to position themselves for potential market shifts over a more extended period.
Andrew: Thanks for explaining, Faith. I have a better understanding of far-month contracts now.
Faith: No problem, Andrew. I’m glad I could help. Let me know if you have any more questions about business and finance topics.