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What is spot market?

Updated: 8/28/2022
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9y ago

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The spot market is a market place where financial instruments, such as commodities, currencies, and securities, are traded for immediate delivery.

Delivery is the exchange of cash for the financial instrument. It may also refer as a physical market of commodities and cash market of equities.

The current price of a financial instrument is called the spot price. It is the price at which an instrument can be sold or bought immediately.

Buyers and sellers create the spot price by posting their buy and sell orders.

In liquid markets, the spot price may change by the second, as orders get filled and new ones enter the marketplace.

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Commodities or securities market where goods are sold in cash and immediately delivered to cusotmers and all contracts sold in this market is immediately applicable.

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