DEFINITION of 'Cash Price'

The actual amount of money that is exchanged when commodities are bought and sold. The cash price usually will include all transaction, carry and transportation costs. Investors looking to benefit from changes in commodity prices can invest in commodity futures, which are anticipated cash prices. Changes in futures trading volume affect the volatility of cash prices.

BREAKING DOWN 'Cash Price'

The cash price is not the same as the futures price. The cash price is the amount paid for commodities on the spot market, where large manufacturers commonly purchase the commodities they need. Commodities are physical products that are generally indistinguishable no matter which company brings them to the marketplace. Examples include corn, crude oil, gasoline, gold, cotton, beef and sugar.

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