How do front-month contracts impact the volatility of digital currencies?

3 answers

• Anshuman YadavJun 29, 2025 · 2 months ago
  Front-month contracts can have a significant impact on the volatility of digital currencies. When these contracts are about to expire, traders often rush to close their positions, which can lead to increased buying or selling pressure. This sudden surge in trading activity can cause rapid price movements and higher volatility in the market. Additionally, the expiry of front-month contracts can also trigger speculative trading and market manipulation, further contributing to the volatility of digital currencies.
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• Saurav Kumar SinghSep 27, 2022 · 3 years ago
  Front-month contracts play a crucial role in shaping the volatility of digital currencies. As the expiration date approaches, traders closely monitor the price movements and adjust their positions accordingly. This heightened attention and trading activity can amplify the price fluctuations of cryptocurrencies, leading to increased volatility. It's important to note that front-month contracts are just one factor among many that influence the volatility of digital currencies, including market sentiment, regulatory developments, and macroeconomic factors.
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• Jay SavaniFeb 23, 2022 · 4 years ago
  Front-month contracts have a direct impact on the volatility of digital currencies. At BYDFi, we've observed that as front-month contracts near their expiration, there is often a surge in trading volume and price volatility. This is because traders who hold these contracts need to either roll them over to the next month or close their positions. The decision-making process of these traders can create significant price movements and increase the overall volatility of digital currencies. It's crucial for traders to closely monitor the expiration dates of front-month contracts to better understand and navigate the market dynamics.
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