Spot Price

Loading the player...

What is the 'Spot Price'

The spot price is 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.

BREAKING DOWN '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.

RELATED TERMS
  1. Spot Market

    1. A commodities or securities market in which goods are sold ...
  2. Narrow Basis

    A condition found in futures markets in which the spot price ...
  3. Spot Rate

    The price that is quoted for immediate settlement on a commodity, ...
  4. Wide Basis

    A condition found in futures markets in which the spot price ...
  5. Contango

    A situation where the futures price of a commodity is above the ...
  6. Spot Trade

    The purchase or sale of a foreign currency or commodity for immediate ...
Related Articles
  1. Investing Basics

    What Does Spot Price Mean?

    Spot price is the current price at which a security may be bought or sold.
  2. Investing Basics

    Understanding the Spot Market

    A spot market is a market where a commodity or security is bought or sold and then delivered immediately.
  3. Investing Basics

    Explaining the Spot Rate

    The spot rate is the immediate purchase price posted on exchanges for purchasing commodities, currency and securities.
  4. Investing Basics

    What Does Contango Mean?

    Contango​ is when the futures price of a commodity is higher than the expected future spot price.
  5. Markets

    Crude Oil Prices: Comparing Future Price Vs. Current Market Price

    Discover the differences between oil futures market prices and oil spot market prices and what leads to the differences between the two.
  6. Professionals

    Which Investments Are Not Securities?

    FINRA/NASAA Series 63 - Which Investments Are Not Securities? In this section Fixed Insurance, endowment or annuities policies, Retirement plans, Commodities or futures contracts and Condominiums.
  7. Forex

    Trading Currencies

    Currencies are traded around the world. Learn how to get in.
  8. Forex

    Open Interest

    Whether you are trading currency futures or spot forex, you can make use of the futures open interest to gauge the overall market sentiment.
  9. Forex Education

    Forex Tutorial: What is Forex Trading?

    What Is Forex?The foreign exchange market is the "place" where currencies are traded. Currencies are important to most people around the world, whether they realize it or not, because currencies ...
  10. Options & Futures

    Contango Versus Normal Backwardation

    It’s important for both hedgers and speculators to know whether the commodity futures markets are in contango or normal backwardation.
RELATED FAQS
  1. How are commodity spot prices different than futures prices?

    Find out more about commodity spot and futures prices, how to calculate a commodity's futures price, and the differences ... Read Answer >>
  2. What are some securities that have spot rates?

    Learn about the types of assets that have spot rates, and understand how the spot rate is used to determine the fair market ... Read Answer >>
  3. How do commodity spot prices indicate future price movements?

    Find out more about commodity spot and futures prices, how to calculate commodity futures prices and how spot prices indicate ... Read Answer >>
  4. What are common factors that affect a security's spot rate?

    Learn the common factors influencing the spot rate for an asset including the bid-ask spread and the forward term structure ... Read Answer >>
  5. How is a share premium account taxed?

    Understand the difference between a spot rate and forward rate. Learn why someone would enter into a contract with a spot ... Read Answer >>
  6. What is the difference between a forward rate and a spot rate?

    Learn about spot and forward contracts, how spot and forward rates are used for spot and forward contracts, and the difference ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center