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  • 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.

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