Spot Market
The spot market is a financial market in which goods or services are traded for immediate delivery. It is a market where buyers and sellers agree to trade a certain amount of a commodity or financial instrument at a certain price for immediate delivery. The spot market is different from the futures market, which is a market for trading contracts for future delivery. The spot market is also known as the cash market or physical market.
History of the Spot Market
The spot market has been around for centuries, with the earliest recorded spot market transactions taking place in the Middle Ages. The spot market was used to trade commodities such as wheat, barley, and other agricultural products. In the 19th century, the spot market was used to trade gold and silver. In the 20th century, the spot market was used to trade currencies, stocks, and other financial instruments.
Today, the spot market is used to trade a wide variety of commodities and financial instruments, including currencies, stocks, bonds, commodities, and derivatives. The spot market is used by traders to take advantage of short-term price movements in the market. It is also used by investors to hedge their portfolios against market volatility.
Comparison Table
| Spot Market | Futures Market |
|---|---|
| Trades for immediate delivery | Trades for future delivery |
| Used to trade commodities and financial instruments | Used to trade contracts for future delivery |
| Used to take advantage of short-term price movements | Used to hedge against market volatility |
Summary
The spot market is a financial market in which goods or services are traded for immediate delivery. It is a market where buyers and sellers agree to trade a certain amount of a commodity or financial instrument at a certain price for immediate delivery. The spot market is different from the futures market, which is a market for trading contracts for future delivery. The spot market is used by traders to take advantage of short-term price movements in the market and by investors to hedge their portfolios against market volatility.
For more information about the spot market, you can visit websites such as Investopedia, The Balance, and Investing.com.
See Also
- Futures Market
- Commodities Market
- Currency Market
- Stock Market
- Bond Market
- Derivatives Market
- Options Market
- Forex Market
- Commodity Exchange
- Securities Exchange
