Definition

1. Noun:
   • The current market price for the immediate purchase, sale, and delivery of a commodity or asset: The "spot price" is the quoted price for a transaction to be settled "on the spot," meaning with immediate delivery and payment, as opposed to a future date. It reflects the current supply and demand in the cash market.

Usage

• The "spot price" is used when discussing the current, real-time trading value of commodities (like oil, gold, wheat), currencies, or securities for immediate settlement.
• It is contrasted with futures prices or forward prices, which are set for delivery at a later date.

Examples

• Noun:
  • The spot price of crude oil fluctuated throughout the trading day.
  • Investors monitor the gold spot price to gauge market sentiment.
  • We paid the prevailing spot price for the natural gas delivery this month.

Advanced Usage

• "To trade at spot": to buy or sell a commodity for immediate delivery at the current spot price.
  • The refinery needed immediate supply, so they had to trade at spot.
• Spot-Forward Spread: the difference between the spot price and the forward price for the same commodity.
  • A positive spot-forward spread, called contango, indicates the future price is higher than the spot price.

Variants and Related Words

• Spot Market (n): the marketplace where financial instruments or commodities are traded for immediate delivery.
  • Physical gold is often traded on the spot market.
• Spot Contract (n): an agreement to buy or sell a commodity at the current spot price with immediate settlement.
• Spot Rate (n): a term often used synonymously with "spot price," especially in foreign exchange (forex) markets for currencies.

Synonyms

• Cash price: Often used interchangeably with spot price, emphasizing immediate cash settlement.
• Current market price: A more general term for the present trading value.

Related Phrases

• Spot transaction: A trade executed at the spot price for immediate settlement.
  • The company conducted a spot transaction to secure copper for production.

Noun

1. the current delivery price of a commodity traded in the spot market