Trade today at today's rate:spot means now, no future date.
A market where financial instruments are traded for immediate delivery, typically settling within two business days (T+2).
The forex spot market is the largest segment of the foreign exchange market.
In plain words
The spot market is where currencies are bought and sold at today’s price for delivery straight away. In practice “straight away” means settlement a short time after the trade: by convention two business days for most currency pairs, and one for a few.
See it move
Stage 2 of 3: Two business days
Why it matters
The spot price is the exchange rate most people mean when they quote a currency, and other products such as forwards and CFDs are priced from it. Retail traders using margin accounts rarely take delivery of currency; their positions are rolled forward each day instead.
Worked example
An example only. The figures are round and invented for the arithmetic: they are not market prices.
On a Monday a bank agrees to buy 1,000,000 euros against US dollars at a spot rate of 1.1000.
- 1Amount fixed on Monday1,000,000 × 1.1000 = 1,100,000 US dollars.
- 2Under the two-day convention both sides deliver on Wednesday, assuming no holidays.
- 3Movements in the rate between Monday and Wednesday do not change either amount.
On Wednesday the bank receives 1,000,000 euros and pays 1,100,000 US dollars, at the rate agreed on Monday.
A common mistake
Spot does not mean the money changes hands instantly. The price is agreed on the spot; the exchange itself follows on the settlement date.
Check yourself
Educational information, not investment advice or a recommendation to trade.