Spot market

Commodities and foreign currencies are traded for immediate delivery and payment on the spot market, also known as a cash market.

The term refers to the fact that the current market price is paid in cash on the spot, or within a short period of time.

A cash sale, whether arranged in person, over the telephone, or electronically, is the opposite of a forward contract, where delivery and settlement are set for a date in the future.

The same is true for a futures contract, which is an agreement to trade a commodity today for a set price at delivery on a specific date in the future.

The natural gas market for contractual commitments that are short term (usually a month or less) and that begin in the near future (often the next day, or within days). In electricity, spot markets are usually organized markets for day-ahead and real-time electricity run by an independent system operator or regional transmission organization.