Delivery Month

Delivery month is key characteristic of a futures contract that designates when the contract expires and when the underlying asset must be delivered or settled. The exchange on the futures contract is traded will also establish a delivery location and a date within the delivery month when the delivery can take place. Not all futures contracts require physical delivery of a commodity, and many are settled in cash. The delivery month is also referred to as the contract month.

Delivery month is simply the month stipulated in the contract for cash settlement or physical delivery. Some commodities can be delivered in any month. Others are only delivered in certain months. If a futures trader is looking to offset or liquidate a position, the delivery months must match or the trader ends up long one month and short a different month rather than canceling out the position. Most futures positions are excited prior to the delivery month, so the contracts nearing delivery often see the most volume and set the current price of the underlying commodity.

On the ticker, delivery month is indicated by a letter. The list below shows the letter next to the month. Although letters are omitted, the coding system runs in alphabetical order with Z corresponding with December.

• January: F
• February: G
• March: H
• April: J
• May: K
• June: M
• July: N
• August: Q
• September: U
• October: V
• November: X
• December: Z

For example, cocoa can only have a delivery month of March, May, July, September or December, while copper can be delivered year round. The complete ticker symbol for a futures contract will describe the commodity as a two character code, the delivery month as a single letter and the year as a two digit number. CCZ18, for instance, indicates a cocoa contract for delivery in December 2018.

There are differing theories on the why of the numbers assigned to different delivery months. While the month letter codes are simply a tradition, the prevailing opinion is that letters that represent actions like bid (B) and ask (A) were removed as well as letters easily confused when spoken like C, D and E. Add in the removal of I and L, which can be easily mistaken when written, and you are more or less at the current list. The true story doesn't really matter as long as traders and the people in the pit know what delivery month they are talking about.