Spot Price

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DEFINITION of 'Spot Price'

The current price at which a particular security can be bought or sold at a specified time and place. A security's spot price is regarded as the explicit value of the security at any given time in the marketplace. In contrast, a securities futures price is the expected value of the security, in relation to its current spot price and time frame in question.

INVESTOPEDIA EXPLAINS 'Spot Price'

Spot prices are most often used in relation to pricing of futures contracts of securities, typically commodities. In pricing commodity futures, the futures price is determined using the commodity's spot price, the risk free rate and time to maturity of the contract (along with any costs associated with storage or convenience). Using the same inputs, a security's spot price can also be determined given the futures price.

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RELATED FAQS
  1. What are some securities that have spot rates?

    Commodities, currencies and bonds are among the many assets that have spot rates. A spot rate is the current price quoted ... Read Full Answer >>
  2. How is the spot price related to a derivative's notional value?

    A derivative's notional value is directly related to the spot price of the security. To calculate the total value of a derivative ... Read Full Answer >>
  3. How do S&P 500 futures work?

    S&P 500 futures are a type of capital asset contract that provides a buyer the right to a predetermined selection of ... Read Full Answer >>
  4. What is the difference between yield to maturity and the coupon rate?

    A bond's coupon rate is the actual amount of interest income earned on the bond each year based on its face value. A bond's ... Read Full Answer >>
  5. How are futures used to hedge a position?

    Futures contracts are one of the most common derivatives used to hedge risk. A futures contract is as an arrangement between ... Read Full Answer >>
  6. Why do futures' prices converge upon spot prices during the delivery month?

    It's a fairly safe bet that as the delivery month of a futures contract approaches, the future's price will generally inch ... Read Full Answer >>
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