Thread: Spot market pricing?

What in the world is "spot market pricing"? I heard the term recently and couldn't figure it out. What is it and how is it used?

If i am correct it is an immediate price on something being traded immediately.

Like the quoted price on a new car which is only valid for today.

Spot price is the real price of whatever you're trading. For example you've got spot gold, and then you've got a bunch of other instruments for gold which are basically futures contracts.

Ya, i've only heard of it in terms of dealing with gold and silver. There's the price of gold and silver which is "spot", and then there's how much you pay over spot, which is the price you shop around for. Like in regards to silver, spot price, plus 6 bucks is the average. So if you can find silver at $1 over spot, then thats a great deal. To get spot market pricing, you'd pretty much have to have a dealers license, or be buying wholesale. Thats what i know of spot market pricing, in regards to gold an silver, which i'm sure is similar to what ever your hearing it be said about.

Hope that helps some..

Ronix

The spot price or spot rate of a commodity, a security or a currency is the price that is quoted for immediate (spot) settlement (payment and delivery). Spot settlement is normally one or two business days from trade date. This is in contrast with the forward price established in a forward contract or futures contract, where contract terms (price) are set now, but delivery and payment will occur at a future date. Spot rates are estimated via the bootstrapping method, which uses prices of the securities currently trading in market, that is, from the cash or coupon curve. The result is the spot curve, which exists for each of the various classes of securities.

ref: Spot price - Wikipedia, the free encyclopedia

Price if you were to buy on the "spot" as opposed buying in the "future"

Ah, thanks guys. I was in a meeting with business types and the term was tossed around. I didn't want to look dumb, so I didn't ask them.