Spot Price

The current market price at which an asset can be bought or sold for immediate delivery — as opposed to a futures price, which specifies delivery at a later date.

The spot price is the "right now" price — what you would pay to take immediate delivery of a commodity or asset today. In physical commodity markets, "immediate delivery" is typically defined as settlement within two business days (T+2), the standard for most financial transactions. Spot prices are continuously quoted during trading hours and reflect current supply and demand.

The relationship between spot prices and futures prices defines the shape of the futures curve. The difference between spot and futures prices is called the "basis." In normal (contango) markets, futures trade above spot because buyers must compensate sellers for the cost of storing and financing the commodity until delivery. In backwardation markets, futures trade below spot because current demand exceeds immediate supply.

Spot prices are the reference point for valuing physical inventories, setting long-term supply contracts, and benchmarking derivatives. For cryptocurrencies, the spot price is what you pay on an exchange for immediate delivery of Bitcoin, Ethereum, etc. The distinction between spot trading and futures trading is important for traders because they have different cost structures, margin requirements, and regulatory oversight.

This definition is for informational and educational purposes only. Nothing on Finance Compass constitutes financial, investment, or trading advice. Always conduct your own research and consult a qualified professional before making financial decisions.