spot price
The current market price at which an asset — such as a commodity, currency, or security — can be bought or sold for immediate delivery.
Example
“The spot price of gold was $2,050 per ounce, while the futures price for delivery in six months was $2,075.”
Memory Tip
SPOT price = the price RIGHT NOW for immediate delivery. On the SPOT.
Why It Matters
Understanding spot prices helps you make informed decisions about buying physical assets or investments. When you see advertised prices for commodities like gold or oil, these are typically spot prices, which directly affect what you pay for related products and services in your daily life.
Common Misconception
Many people think the spot price is the only price they will pay for an asset, but this ignores additional costs like shipping, storage, insurance, and dealer markups. The actual price you pay as a consumer is usually significantly higher than the quoted spot price.
In Practice
If the spot price of gold is 2000 dollars per ounce today, a jewelry store will not sell you gold at that price because they add their own markup, shipping costs, and profit margins. You might actually pay 2200 to 2400 dollars per ounce when you buy gold jewelry or coins from a retailer.
Etymology
SPOT (immediate, on the spot) PRICE. The PRICE for delivery right NOW on the SPOT.
Common Misspellings
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See Also
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