ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The spot market is where financial instruments, such as commodities, currencies, and securities, are traded for immediate delivery. Delivery is the exchange of cash for the financial instrument. A futures contract, on the other hand, is based on the delivery of the underlying asset at a future date.

Detailed explanation-2: -A spot market is a financial market where financial instruments and commodities are traded for instantaneous delivery. Delivery refers to the physical exchange of a financial instrument or commodity with a cash consideration.

Detailed explanation-3: -Cash markets are also known as spot markets as the transaction is settled on spot. Cash market transactions can be conducted either in a regulated environment such as a stock exchange or on some over the counter transactions that are deemed as unregulated.

Detailed explanation-4: -The current price of a financial instrument is called the spot price. It is the price at which an instrument can be sold or bought immediately. Buyers and sellers create the spot price by posting their buy and sell orders.

Detailed explanation-5: -Spot Market and Exchanges The New York Stock Exchange (NYSE) is an example of an exchange where traders buy and sell stocks. This is a spot market. The Chicago Mercantile Exchange (CME) is an example of an exchange where traders buy and sell futures contracts; this is a futures market.