What is a spot purchase contract?
In finance, a spot contract, spot transaction, or simply spot, is a contract of buying or selling a commodity, security or currency for immediate settlement (payment and delivery) on the spot date, which is normally two business days after the trade date.Click to see full answer. Hereof, what is a spot exchange rate contract?A spot…
In finance, a spot contract, spot transaction, or simply spot, is a contract of buying or selling a commodity, security or currency for immediate settlement (payment and delivery) on the spot date, which is normally two business days after the trade date.Click to see full answer. Hereof, what is a spot exchange rate contract?A spot exchange rate contract is a contract that involves the purchase or sale of a currency for immediate delivery and payment on the spot date, which is normally two business days after the trade date. The spot rate, or spot price, is the price quoted for the immediate settlement of the spot contract.One may also ask, what is a spot month? The spot delivery month is the nearest month when any futures contract for a given commodity may mature. It is the earliest possible month a futures contract may become deliverable and is dependent on what commodity the contract covers. The spot delivery month is also known as the nearby month or front month. Hereof, what is an example of a spot market? An example of a spot market commodity that is often sold is crude oil. It is sold at the existing prices, and physically supplied later. A commodity is basic goods, which is substitutable with other similar commodities. Some examples of commodities are grains, gold, oil, electricity and natural gas.Is a spot contract a derivative?Much of currency trading is done on what is called the spot, or “cash,” market where currency pairs are bought and sold at their present value and delivered within a two-day period. Currencies, however, are commonly traded as part of derivative contracts in futures, forwards, options and swaps.
