What is meant by Spot Trading?

[eliasisaac5]

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.

 

[ImamShaheb]

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.

.... Meanwhile, it's said that, Spot is the safest option for traders at crypto space!! It's sooo much popular that, One of the Crypto giant(Exchange), Bitget is offering BOT for spot traders!

 

[Mariyam franklin]

Spot trading stands as the prevalent form of trading embraced by novices in the crypto market. Within spot trading, individuals buy and sell cryptocurrencies at the present market value of a specific crypto asset.

 

[Bash4j]

.... Meanwhile, it's said that, Spot is the safest option for traders at crypto space!! It's sooo much popular that, One of the Crypto giant(Exchange), Bitget is offering BOT for spot traders!View attachment 59024

Taking the Spot trading experience to the next level seems amazing. This new Spot feature aims to make this sophisticated investment method more accessible for new crypto traders without profound expertise in trading.

 

[bambiturnhau]

Could you please explain the difference between spot contracts and future contracts? I'm a bit confused about how they relate to each other.

 

[camtranu2nh8]

Is the spot rate fixed or does it fluctuate like exchange rates in the market? Your article didn't quite clarify this point.

 

[lamtraung9aj]

I agree that the forex market is massive, with such a huge daily trade volume. It's fascinating how financial instruments and currencies are exchanged on such a scale.

 

[mantruang8]

I'm not entirely convinced that most commodity trading involves contracts for future settlement. What about physical delivery of commodities? It seems like there might be more to explore in this aspect.

 

[DominionAJ]

Is the spot rate fixed or does it fluctuate like exchange rates in the market? Your article didn't quite clarify this point.

As much as I know spot rate seems to be fixed, the only time there is disparity in spot rate among exchanges i when a token is just newly listed to another exchange it might come with a different rate in such exchange in order to have users encouraged.

Always watch out for new listings by exchanges because there will definitely be a slight difference which might benefit you a lot.

 

[ImamShaheb]

As much as I know spot rate seems to be fixed, the only time there is disparity in spot rate among exchanges i when a token is just newly listed to another exchange it might come with a different rate in such exchange in order to have users encouraged.

Always watch out for new listings by exchanges because there will definitely be a slight difference which might benefit you a lot.

The circumstance you've stated is highly dengerous for newbies & veterans as well. Why?

Because, of the volatility! Previously we've seen such calamities where exchanges needed 15-30 mins to stabilise the market of a new listed coin/token.

That's why it is advised,not to touch any new listed token/coin at least for the first one hour.