DEFINITION of 'Spot Commodity'

A commodity traded on the spot market. That is, with the expectation of actual delivery, as opposed to a commodity future that is usually not delivered.

BREAKING DOWN 'Spot Commodity'

This is the opposite of a futures contract, which usually expires before any physical delivery.

  1. Current Delivery

    A type of futures contract that requires the delivery of the ...
  2. Delivery Price

    The delivery price is the price at which one party agrees to ...
  3. Convergence

    Convergence is the movement of the price of a futures contract ...
  4. Narrow Basis

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

    The physical commodity that underlies a futures contract or is ...
  6. Forwardation

    A term used in pricing futures contracts. Forwardation is a ...
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  1. 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 >>
  2. Can commodities also be investments?

    Learn about the commodities trade and several different ways investors may participate. Find out about some of the advantages ... Read Answer >>
  3. How do I learn technical skills for trading commodities?

    Learn what resources are available to learn about trading commodities, and understand some of the differences between stocks ... Read Answer >>
  4. What is the Difference Between a Forward Rate and a Spot Rate?

    The forward rate is the settlement price of a forward contract, while the spot rate is the settlement price of a spot contract. Read Answer >>
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