Spot Price
Spot price refers to the price of a commodity or financial asset at a particular point in time, usually the current time. It is the price paid for an asset or commodity at the moment of purchase, without any delay.
Key features of spot price:
- Current price: Spot price is the price for immediate delivery of the asset or commodity.
- Real-time: Spot prices fluctuate continuously throughout the trading day.
- No delay: Payment and delivery occur simultaneously at the spot price.
- Market determination: Spot prices are determined by the forces of supply and demand.
- Hedging: Spot prices are often used for hedging purposes, as they can provide a reference point for future prices.
Examples:
- Spot price of gold: The price of gold per ounce at the current moment.
- Spot price of oil: The price of oil per barrel at the current moment.
- Spot price of the dollar: The exchange rate for the dollar against other currencies.
Uses:
- Inventory management: Spot prices are used to determine the cost of inventory.
- Futures trading: Spot prices are used as a reference point for futures contracts.
- Hedging: Spot prices are used for hedging against potential price fluctuations.
- Market analysis: Spot prices are used to analyze market trends and patterns.
Note: Spot prices can vary widely depending on the specific asset or commodity, the location of the market, and other factors.
FAQs
What is meant by spot prices?
A spot price is the current market price at which an asset or commodity can be bought or sold for immediate delivery. It reflects the real-time value of an asset in the market at that moment.
What is the meaning of spot price in Nifty?
The spot price in Nifty refers to the current price of the Nifty 50 index in the cash or spot market. It represents the value at which the Nifty is trading at the current moment.
What is the difference between market price and spot price?
The market price is a general term for the current price of an asset, while the spot price specifically refers to the price for immediate delivery of that asset. The market price can refer to either spot or future prices.
What is an example of a spot market?
A spot market is where financial instruments, commodities, or assets are traded for immediate delivery. An example is the stock market, where shares are bought and sold at their current price for immediate transfer.
What is an example of a spot transaction?
A spot transaction is the purchase of a commodity, such as crude oil, at its current market price with immediate delivery. For example, buying gold at the current price and receiving it right away is a spot transaction.
