Spot price is the current cash-market price for an identified asset, quote basis, and customary prompt-delivery location and time.
Spot price is the current cash-market price for an identified asset under customary prompt-delivery terms. A complete spot quote states what is being priced, the unit and currency, the location or venue, the observation time, and whether the value is a bid, ask, trade, midpoint, benchmark, or assessed price.
“Spot” does not always mean physical handover at that instant. It means the market’s standard near-term settlement or delivery convention, which can vary by commodity, currency, security, location, and trading venue.
| Quote field | Why it matters |
|---|---|
| Underlying asset | Identifies the commodity, currency pair, security, or index |
| Grade or specification | Distinguishes economically different deliverables |
| Unit and quantity | Prevents errors between barrels, bushels, tonnes, ounces, shares, or currency units |
| Currency | Identifies the denomination of the quoted price |
| Location or venue | Captures transport, storage, and market-access differences |
| Price type | Distinguishes bid, ask, last trade, midpoint, fixing, or assessment |
| Timestamp and time zone | Makes the quote reproducible in a moving market |
| Delivery or value date | Defines what “prompt” delivery means in that market |
| Data source | Shows whether the quote is executable, indicative, calculated, or assessed |
A statement such as “oil is at $70” is incomplete. It does not identify the grade, location, unit, delivery timing, source, or side of the market.
Two numbers can both be described as spot prices while relying on different evidence. The source should identify how the number was produced and whether a transaction is available at that level.
| Source type | What the number may represent | Main limitation |
|---|---|---|
| Executed trade | Price of a completed transaction | It may be stale, unusually small, or based on different terms. |
| Firm bid or ask | Price offered for a stated quantity and time | The quote may be withdrawn or available for less size than required. |
| Dealer indication | Nonbinding estimate of where a dealer might transact | It is not a commitment to trade. |
| Composite quote | Combination of prices from several contributors or venues | Components may have different timestamps, sizes, or eligibility rules. |
| Benchmark or fixing | Reference value calculated under a published methodology | It may use a window, averaging, exclusions, or assessments rather than one executable trade. |
| Price assessment | Estimate produced from market evidence and editorial methodology | Thin activity and judgment can affect the result. |
| Model-derived value | Estimate inferred from related instruments or assumptions | It can diverge from an executable cash-market level. |
An analyst should not silently replace one source type with another. For example, a contract that settles to a benchmark cannot be valued reliably from an unrelated dealer’s last trade without reconciling the methodology, time, and delivery terms.
| Market | What spot commonly means | Important qualification |
|---|---|---|
| Physical commodity | Cash price for customary prompt delivery | Grade, location, quantity, and logistics matter |
| Foreign exchange | Current exchange rate for the standard spot value date | Pair direction and value date can vary |
| Equity or bond | Current cash-market bid, ask, or trade | “Last price” may be stale or non-executable |
| Precious metal | Price for specified metal, purity, unit, and market convention | Retail dealer premiums can differ from wholesale benchmarks |
| Index | Current calculated index level | An index level is not directly deliverable |
| Digital asset | Current venue-specific cash price | Venue, custody, currency, and market fragmentation matter |
The page’s derivatives context is broad, but the CFTC definition is narrower: spot price is the price of a physical commodity for immediate delivery at a given time and place.
A spot commodity is the physical asset bought or sold under prompt-delivery terms. Its spot price is the quote for that transaction. The terms are related, but they are not interchangeable: one names the asset or cash-market transaction, while the other names its price.
| Question | Spot commodity | Spot price |
|---|---|---|
| What is it? | The physical commodity or prompt-delivery transaction | The cash-market quote for specified terms |
| What must be specified? | Grade, quantity, location, delivery window, and payment terms | All commodity terms plus currency, price type, timestamp, and source |
| Main operational concern | Inspection, transport, storage, title, and settlement | Quote comparability, execution, valuation, and basis |
| Example | A refinery purchases a prompt cargo of a stated crude grade | The agreed dollars-per-barrel price for that cargo |
Physical-market participants care about the delivered cash cost, not a generic screen price. Assume a wholesaler sees a benchmark quote of $2.40 per unit but must also pay a location differential of $0.08, freight of $0.04, and handling of $0.02. The resulting delivered cost is $2.54 per unit before any taxes or financing:
1Delivered cash cost = benchmark + location differential + freight + handling
2 = $2.40 + $0.08 + $0.04 + $0.02
3 = $2.54 per unit
The benchmark remains useful, but it is not the complete transaction price. This distinction matters when comparing a physical purchase with a futures hedge or valuing inventory at a specific location.
Assume a market displays:
| Field | Quote |
|---|---|
| Best bid | $99.90 |
| Best ask | $100.10 |
| Last trade | $99.75 |
| Midpoint | $100.00 |
A buyer may need to pay the ask, while a seller may receive the bid. The last trade could have occurred earlier under different liquidity. Calling all four values “the spot price” hides the execution question.
For valuation, a policy may specify bid, ask, midpoint, closing price, benchmark, or another approved source. The appropriate choice depends on the instrument, accounting policy, mandate, and intended use.
Assume a dealer quotes EUR/USD at 1.0824 / 1.0826. The quote states U.S. dollars per euro:
1.0824 bid.1.0826 ask.0.0002 dollar per euro, commonly described as two pips for this currency pair.A customer buying EUR 100,000 would use the ask:
1USD paid = EUR 100,000 x 1.0826 USD/EUR
2 = USD 108,260
A customer selling EUR 100,000 at the same displayed quote would use the bid and receive USD 108,240. The USD 20 difference illustrates the spread on that amount before commissions, markups, settlement adjustments, or market movement.
The example still needs a timestamp, dealer or venue, and value date to be a complete trade record. Reversing the pair to USD/EUR also changes the numerical quote; a rate cannot be interpreted without its currency-pair direction.
| Value | Main purpose | Why it differs from spot |
|---|---|---|
| Futures price | Price for a specified future contract month | Includes time, carry, expectations, and contract terms |
| Forward price | Agreed price for later OTC settlement | Includes counterparty and customized terms |
| Settlement price | Exchange-calculated price used for daily or final settlement | May use a defined calculation window or methodology |
| Benchmark or fixing | Standardized reference calculated under published rules | May aggregate transactions or assessments |
| Net asset value | Accounting value of a fund’s assets less liabilities | Calculated at stated times, not continuously executable |
| Dealer retail price | Customer-facing purchase or sale price | Can include markup, handling, fabrication, custody, or delivery |
A futures price above spot does not necessarily imply that the market expects spot to rise. Cost of Carry, income, convenience yield, and delivery terms can produce a difference.
Assume a hypothetical cash commodity quote and futures quote are economically comparable:
| Quote | Price |
|---|---|
| Prompt cash price | $70.50 per unit |
| Nearby futures price | $71.20 per unit |
Using the common convention:
1Basis = cash price - futures price
2 = $70.50 - $71.20
3 = -$0.70 per unit
The negative basis shows that cash is below the nearby futures price at that observation time. It does not prove an arbitrage opportunity.
If the cash quote is for a different grade or location, the $0.70 also reflects quality, transport, storage, and local supply conditions. Some markets or analysts define basis with the opposite sign, so the convention must be stated.
Arbitrage can connect related markets, but it does not eliminate legitimate differences in location, quality, timing, funding, and transaction costs.
Spot is an input to many forward, futures, option, and swap models. The model is only as reliable as the quote’s comparability and timestamp.
A commercial exposure may be priced in a local cash market while its hedge uses an exchange futures contract. The difference creates Basis Risk.
Funds, companies, and risk teams need approved pricing sources and valuation times. A public website quote may not satisfy the policy used for official valuation or accounting.
Manufacturers, merchants, and inventory holders care about delivered cost, not only a headline benchmark. Freight, handling, quality adjustment, and taxes can materially change the cash amount paid.
These sources provide general market context, not a live executable quote. The relevant contract, benchmark methodology, venue data, and transaction documents control a specific valuation or settlement.
This page is for financial education only. It does not provide a live quote, valuation opinion, execution instruction, or recommendation to trade a cash asset or derivative. Verify current prices, contract terms, and transaction costs with the relevant venue, dealer, broker, or approved data source.