Spot and Forward FX Markets

Spot and forward FX markets are the markets where currencies are exchanged for near-term settlement or for a specified future date. This branch explains spot rates, spot markets, forward markets, and non-deliverable forwards in practical FX records.

Use these pages when a reader needs to know whether an exchange-rate reference applies now, settles later under a forward contract, or uses cash settlement because the currency is not delivered.

What This Branch Covers

Decision Lens

Start with the settlement instruction. If the record calls for near-term conversion, use spot-market terms; if the record locks a future exchange rate or cash-settled difference, use forward-market or NDF terms.

Evaluation Checklist

• Identify the trade date, value date, and settlement currency.
• Check whether the rate is spot, forward, or a reference rate used for internal valuation.
• Distinguish deliverable currency exchange from cash-settled forward exposure.
• Review counterparty, collateral, and documentation terms when the page is used for a real contract.
• Do not infer that a forward trade removes all economic risk.

Common Mistakes

• Calling any current-looking exchange rate a spot rate without checking the value date.
• Treating forward-market pricing as a prediction of future spot rates.
• Ignoring cash-settlement mechanics in non-deliverable forwards.
• Comparing quotes from different providers without checking spreads, fees, and timing.

In this section

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