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Glossary

Spot

Definition

A direct trade on a market price with a standard settlement date (value date) of two business days from the trade date.

What is the spot price?

In finance, the “spot” price is the current market price at which an asset can be bought or sold for immediate delivery. In contrast to futures prices, the spot price is the price for immediate transactions and delivery.

Why is the spot price important to consider when trading?

The spot price is essential for traders, especially in commodities and currency markets, as it reflects the current market value of an asset. It's influenced by supply and demand dynamics and can fluctuate rapidly. Understanding spot prices helps traders make immediate trading decisions, assess market trends, and develop strategies for both short-term and long-term investments. In arbitrage trading, differences between spot prices and futures prices can also present profitable opportunities.

Related Items

Spot market Forward-forward contract Forward outright Currency trading
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