Spot Market

What is a Spot Market?

A spot market is the market for the exchange of international commodities on which transactions are carried out for immediate payment and prompt delivery. The spot market is also known as a locomotive market, cash market or effective market.

The items traded on the spot markets are foreign exchange, securities or commodities performed under standardised contracts. A mutual settlement period of a maximum of two trading days is common. Transactions that exceed this period are assigned to the futures market.

Spot markets also exist in the transport and logistics sector. On this spot market, freight and released trucks are offered daily. Trading “on the spot” i.e. the short-term placing of orders, takes place at the current daily price.

On the digital freight exchange platforms, a company indicates which goods need to be transported, then various transport service providers submit their transport offers. On receipts of offers, the client books the offer that suits its business. The transaction is then completed within a short period of time.