eliasisaac5
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Spot transactions involve the purchase or sale of a foreign currency, financial instrument, or commodity for immediate delivery on a specified point date. Most spot contracts involve physical delivery of the currency, commodity, or instrument. The price difference between a future or forward contract and a spot contract is based on the time value of the payment, which is determined by interest rates and maturity. The exchange rate underlying the transaction is called the spot rate.
Currency spot contracts are the most common type and are usually settled within two business days. The local currency market (forex) is the world's largest market with a daily trade volume exceeding $5 trillion. Most commodity transactions are for future settlement and are not delivered. Contracts can be between a company and a financial institution, but most often they are between two financial institutions. Most commodity trading involves contracts for future settlement rather than delivery, with profits or losses paid in cash.
Currency spot contracts are the most common type and are usually settled within two business days. The local currency market (forex) is the world's largest market with a daily trade volume exceeding $5 trillion. Most commodity transactions are for future settlement and are not delivered. Contracts can be between a company and a financial institution, but most often they are between two financial institutions. Most commodity trading involves contracts for future settlement rather than delivery, with profits or losses paid in cash.