Spot Market

What is a spot market?

The spot market is where a financial instrument — a currency pair, a commodity, or a security — is bought or sold for immediate settlement at the current market price, known as the spot price. “Immediate” is relative to the asset: in spot forex, settlement conventionally happens within two business days, while in other markets it can mean same-day settlement, but in both cases the price agreed is for value essentially “now,” not at some point in the future.

This is the direct opposite of a futures contract, where a price is agreed today for delivery or settlement at a specified date later on.

Spot forex, in practice

Most retail forex trading happens on, or referenced to, the spot market. When a trading platform shows the live exchange rate for a currency pair like EUR/USD, that rate is the spot price. Retail CFD and margin-forex brokers typically use the spot price as the basis for opening and closing trades, even though the underlying trade may be rolled over daily via a swap charge rather than physically settled.

Why the distinction matters

Understanding spot versus future-dated pricing helps explain why a commodity or currency can have two different quoted prices at the same moment — the spot price for immediate value, and one or more futures prices for value at later dates. The gap between spot and futures prices (the “basis”) reflects factors like interest-rate differentials, storage costs for physical commodities, and market expectations, and it is a core building block for anyone moving from spot trading into futures or forward contracts.

Quick recap

• The spot market prices an asset for immediate (or near-immediate) settlement.
• It contrasts with futures/forward markets, which price value for a future date.
• Most retail forex, CFD, and commodity trading is referenced to the spot price.
• The gap between spot and futures prices reflects rates, costs, and market expectations.