The spot price is the current market price of an asset, like a stock, commodity, or currency. It's the price the buyer pays on the spot. The spot price of an asset is important in determining its future price: the price of anassetagreed upon by a buyer for delivery in the future. ...
This is why companies plan their purchases by using futures contracts that allow them to eliminate the risk of having sudden changes in raw material prices.This definition of a spot price is easier to understand if we explain it by using a common transaction as an example....
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What Factors Affect Market Price? What Are the Different Types of Marketing Supplies? What is a Futures Price? What is a Spot Trade? What is a Spot Commodity? What are Spot Prices? Discussion Comments Share WiseGeek, in your inbox
If a contract settles later than the spot contract, such as forwards and futures, their price is a combination of the spot price and the time value of money, i.e. the cost of interest up to the settlement date. In Forex, the difference between domestic and foreign interest rates is one...
The gold spot price or gold current price, at which the physical gold can be sold or bought at a specified time and place. In contrast, a gold futures price is in relation to its current spot price and time frame in question. The spot price is calculated according to the most recent ...
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The prices of commodities futures are not always higher than spot prices. Futures prices take into account expectations of supply and demand and production levels, among other factors. The difference in a commodity's spot price and the futures price at any given time is attributable to th...
While spot prices are specific to both time and place, in a global economy the spot price of most securities or commodities tends to be fairly uniform worldwide when accounting for exchange rates. In contrast to the spot price, afuturesor forward price is an agreed-upon price forfuture deliv...