Spot Price
Spot price is the current market price of a commodity, security, or currency. It is the price at which a buyer and seller agree to transact immediately. Spot prices are used as a benchmark for other transactions, such as forward contracts, futures contracts, and options. Spot prices are also used to determine the value of a currency or security in the current market. Spot prices are typically quoted in terms of the currency of the country in which the commodity is traded.
History of Spot Price
The concept of spot price has been around since the early days of trading. In the past, spot prices were determined by the physical exchange of goods and services. As the world has become more interconnected, spot prices have become more closely linked to the global market. Spot prices are now determined by the supply and demand of a particular commodity or security.
Spot prices are also affected by economic and political events. For example, a country’s currency may be affected by a political event, such as an election or a change in government. Similarly, a commodity’s spot price may be affected by a natural disaster or a change in the global supply and demand of the commodity.
Table of Comparisons
| Commodity | Spot Price | Forward Price |
|---|---|---|
| Gold | $1,500/oz | $1,550/oz |
| Oil | $50/barrel | $55/barrel |
| Currency | $1.00/USD | $1.05/USD |
Summary
Spot price is the current market price of a commodity, security, or currency. It is the price at which a buyer and seller agree to transact immediately. Spot prices are used as a benchmark for other transactions, such as forward contracts, futures contracts, and options. Spot prices are also affected by economic and political events. For more information about spot prices, visit websites such as Investopedia, Bloomberg, and Reuters.
See Also
- Forward Price
- Futures Price
- Options Price
- Bid Price
- Ask Price
- Market Price
- Fair Value
- Intrinsic Value
- Time Value
- Implied Volatility
