Types Of Spot Market English

Types Of Spot Market

The types of spot markets include commodity spot markets, where physical goods like agricultural products or metals are traded; currency spot markets for immediate foreign exchange transactions; and equity spot markets, dealing in stocks and securities for immediate delivery and settlement.

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Spot Market Meaning

The spot market is a financial market where commodities, currencies, and securities are traded for immediate delivery. Unlike future markets, transactions in the spot market are settled ‘on the spot’, meaning the trade is completed and payment made almost instantaneously or within a short timeframe.

In the spot market, transactions are executed instantly at current market prices. Commodities, currencies, and securities are exchanged and delivered immediately, or within a short period, typically no more than two business days after the trade date.

This immediacy contrasts with futures markets, where contracts are agreed upon now but executed at a later date. The spot market is crucial for day-to-day trading, providing liquidity and real-time pricing, essential for both indi