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What is cash market?
A cash market, also known as a spot market or physical market, is a market for trading financial instruments for immediate delivery. A commodity's spot price, also known as cash price, is the current quote for immediate purchase, payment, and delivery of that commodity. Commodity trading takes place "on the spot."
A cash market, also known as a spot market, is a financial market where securities or commodities are traded for immediate delivery and payment. Transactions in the cash market involve the immediate exchange of the underlying asset for cash. This market contrasts with derivatives markets, where trading involves contracts based on the future delivery of assets. Cash markets are essential for determining the real-time price of an asset, reflecting current supply and demand dynamics. Common examples include stock exchanges, where shares are bought and sold on the spot, and commodity markets, where goods like oil, gold, or agricultural products are exchanged. Investors and traders use the cash market for hedging, speculation, and liquidity purposes.
A cash market, also known as the spot market, is a financial marketplace where assets like stocks, commodities, or currencies are bought and sold for immediate delivery and payment. Unlike futures or derivatives markets, where transactions are settled at a future date, cash market transactions are settled on the spot or within a short period, typically two business days.
Cash markets operate in various forms, such as stock exchanges (e.g., NYSE, NASDAQ) or over-the-counter (OTC) platforms. Prices in these markets are driven by real-time supply and demand dynamics.
Investors and traders use cash markets to acquire actual ownership of the underlying assets. These markets are fundamental to the economy, facilitating liquidity and price discovery for financial instruments.
Cash markets operate in various forms, such as stock exchanges (e.g., NYSE, NASDAQ) or over-the-counter (OTC) platforms. Prices in these markets are driven by real-time supply and demand dynamics.
Investors and traders use cash markets to acquire actual ownership of the underlying assets. These markets are fundamental to the economy, facilitating liquidity and price discovery for financial instruments.
Nov 04, 2022 19:20