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I was reading up a bit on futures and found that futures clearing merchants write months in a very unexpected way:

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

Why is that? Why couldn't they use something more traditional like Jan, Feb, etc. Or if they needed single letter months why not use A, B.... instead of starting at F and skipping around?

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Futures tickers use the month symbols. So a two year treasury future in CME might be "TUU5" where "TU" is a prefix symbol for any two year treasury future and U represents the delivery month, in this case the 3rd quarter month (September) and "5" is for 2015. I hope the benefit of such a succinct string for the contract is clear. In fact, once you know the product many traders will just refer to the month and year portion of the ticker, eg U5 instead of TUU5.

In practice even many futures traders only know by reflex the quarter month symbols (H M U Z), and some contracts only have quarter expires (commonly, nearby months may have contracts but as you go further out contracts may exist only for quarter months).

Why did they skip to F? Note there are other letters skipped including another range: RST. I've never been given an utterly convincing explanation but usually people think it has to do with picking letters that sound distinct, also when written on slips of paper in high time pressure (L and I can look the same and so are skipped). Perhaps BCDE all sounded too similar (imagine consecutive month contracts like D5 E5 or B5 being shouted to you in the pit).

  • I dont see why such a succinct format is more beneficial than just using month short names (Jan, Feb, Mar..). The shortnames are clear (no mixup between I and L) and are really just as fast as U/H/M/Z/F.... I find this particularly perplexing because this is the only trading space I know of that uses this notation. – David Grinberg Jun 27 '15 at 22:09
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    "Dec5" is longer than "Z5" when written. So it will take you longer to write it (important in the pit). If you think futures symbols are confusing, consider the old options notation. Far more confusing. – Chan-Ho Suh Jun 27 '15 at 22:23
  • As to why FGHJK, it's on a qwerty keyboard in this order, as is MNVXZ, with the constraint of having an ascending series and not using letters that look like numbers this leaves Q and W or Q and U, choice was probably to use Q and U because that's two consecutive months on the same row. Q V W X would be difficult. – hroptatyr Jul 27 '17 at 3:01
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One explanation from https://www.quora.com/In-futures-contracts-each-month-is-represented-by-a-letter-code-This-is-done-alphabetically-but-why-does-it-start-in-F-for-January-and-why-are-some-letters-skipped:

exclude letters (A, B, C, D, E, I, L, O, P, R, S, T, W, Y) that could potentially be confused with numbers (B/8, I/1, O/0, S/5, T/7), assigned letters (O/Q, U/V), existing contracts (W/Wheat, S/Soybeans), or other actions (A/Ask, B/Bid, C/Call, P/Put).

FYI: Option naming convention

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