Category: Spot Rate

Understanding a Spot Trade

Foreign exchange spot contracts are the most common type and are usually specified for delivery in two business days, while most other financial instruments settle the next business day. The spot foreign exchange (forex) market trades electronically around the world. It is the world’s largest market, with over $5...
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What Is a Spot Trade?

A spot trade, also known as a spot transaction, refers to the purchase or sale of a foreign currency, financial instrument, or commodity for instant delivery on a specified spot date. Most spot contracts include the physical delivery of the currency, commodity, or instrument; the difference in the price of a future or...
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Forward Rates

Unlike a spot contract, a forward contract, or futures contract, involves an agreement of contract terms on the current date with the delivery and payment at a specified future date. Contrary to a spot rate, a forward rate is used to quote a financial transaction that takes place on a future...
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Delivery of Forex Contracts

The standard delivery time for a forex spot rate is T+2 days. Should a counterparty wish to delay delivery, they will have to take out a forward contract. Most of the time it is the forex dealers that have to manage this. For example, if a EUR/USD trade is executed...
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Understanding the Forex Spot Rate

The forex spot rate is the most commonly quoted price for currency pairs. It is the basis of the most frequent transaction in the forex market, an individual forex trade. This rate is much more widely published than rates for forward exchange contracts (FECs) or forex swaps. The spot forex rate differs from the forward...
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What Is the Forex Spot Rate?

The forex spot rate is the current exchange rate at which a currency pair can be bought or sold. It is the prevailing quote for any given currency pair from a forex broker. In forex currency trading it is the rate that most traders use when trading with an online retail forex...
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