Forex Spot Rate

What is the 'Forex Spot Rate'

The forex spot rate is the current exchange rate at which a currency pair can be bought or sold. The spot forex rate differs from the forward rate in that it prices the value of currencies compared to foreign currencies today, rather than at some time in the future. The spot rate in forex currency trading, is the rate that most traders use when trading with an online retail forex broker.

BREAKING DOWN 'Forex Spot Rate'

Although the forex spot rate calls for delivery within two days, this rarely occurs. Traders that hold a position for longer than two days will have their trades "reset" by the broker, i.e. closed and reopened at the same price, just prior to the two-day deadline.

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RELATED FAQS
  1. What is the difference between trading currency futures and spot FX?

    The forex market is a very large market with many different features, advantages and pitfalls. Forex investors may engage ... Read Answer >>
  2. In the forex market, how is the closing price of a currency pair determined?

    The foreign exchange market, or forex, is the market in which the currencies of the world are traded by governments, banks, ... Read Answer >>
  3. What is hedging as it relates to forex trading?

    When a currency trader enters into a trade with the intent of protecting an existing or anticipated position from an unwanted ... Read Answer >>
  4. What are some securities that have spot rates?

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