spot market
Noun: 1. A market for the immediate purchase and delivery of a commodity or asset: A spot market is a financial marketplace where financial instruments, such as commodities, currencies, or securities, are traded for immediate delivery. The transaction is settled "on the spot," meaning delivery and payment occur almost immediately after the trade agreement, typically within one to two business days. The price at which the trade occurs is called the spot price.
The term "spot market" is used to distinguish transactions involving immediate delivery from those involving future delivery, which are traded on futures markets. It is commonly discussed in finance, economics, and business contexts. * It is often used with verbs like trade on, buy on, sell on, or operate in. * It is frequently modified by the type of commodity traded (e.g., oil spot market, foreign exchange spot market).
- Noun:
- The price of crude oil on the spot market fluctuates daily based on global supply and demand.
- Most currency transactions between banks occur in the foreign exchange spot market.
- Farmers can sell their grain on the spot market for immediate cash, rather than locking in a price for a future harvest.
- "Spot price": The current market price at which an asset can be bought or sold for immediate delivery.
- The spot price for gold rose sharply following the economic news.
- Contrast with Futures Market: A key distinction in finance is between the spot market (for immediate delivery) and the futures or forward market (for delivery at a specified future date).
- A refiner might buy oil on the spot market to meet short-term needs while also using the futures market to hedge against future price increases.
- Spot price (n): The current price for immediate delivery in a spot market.
- Over-the-counter (OTC) market (n): Many spot markets, especially for currencies, are decentralized OTC markets where trades occur directly between parties.
- Physical market (n): A term sometimes used synonymously with spot market, emphasizing the actual, physical delivery of the commodity.
- Cash market: A synonym often used interchangeably with "spot market," particularly for commodities.
- Physical market: Emphasizes the trade of the actual physical commodity for immediate delivery.
- To trade spot: To engage in transactions on the spot market.
- The company decided to trade spot to cover its short-term fuel requirements.
- Spot transaction: A single trade executed on the spot market.
- The spot transaction was settled within two business days.
- a market in which a commodity is bought or sold for immediate delivery or delivery in the very near future