Spot contract

In finance, a spot contract, spot transaction, or simply spot, is a contract of buying or selling a commodity, security or currency for settlement (payment and delivery) on the spot date, which is normally two business days after the trade date. The settlement price (or rate) is called spot price (or spot rate). A spot contract is in contrast with a forward contract or futures contract where contract terms are agreed now but delivery and payment will occur at a future date.

Spot prices and future price expectations

Depending on the item being traded, spot prices can indicate market expectations of future price movements in different ways. For a security or non-perishable commodity (e.g. silver), the spot price reflects market expectations of future price movements. In theory, the difference in spot and forward prices should be equal to the finance charges, plus any earnings due to the holder of the security, according to the cost of carry model. For example, on a share the difference in price between the spot and forward is usually accounted for almost entirely by any dividends payable in the period minus the interest payable on the purchase price. Any other cost price would yield an arbitrage opportunity and riskless profit (see rational pricing for the arbitrage mechanics).

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Camino Announces Filing of Pre-Feasibility Study Technical Report and Provides Update on Previously Announced Acquisition ...

ACCESSWIRE 17 Mar 2025
Such risk factors and uncertainties include, among others, the risk that the Proposed Transaction will not be completed as anticipated, or at all; the risk that the Company will not obtain from the ...
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