What Is a Spot Market? The term spot market refers to the place where financial instruments are traded for cash for immediate delivery. This is known as spot trading or spot-trading. Assets traded in the spot market include commodities, currencies (spot currency), and securities. Spot contracts are used to execute these transactions. Delivery occurs when the buyer and seller exchange cash for the financial instrument. A futures contract, on the other hand, is based on the delivery of the underlying asset at a future date. Exchanges and over-the-counter (OTC) markets may provide both spot trading and/or futures trading options. Key Takeaways Financial instruments trade for immediate delivery in the spot market. Many assets quote a spot price and a futures or forward price. Most spot market transactions settle one business day after the transaction while foreign exchange spot trading settles in two business days. Spot market transactions can take place on an exchange or over-the-counte...