Spot rate definition
/What is the Spot Rate?
The spot rate is the current price at which a currency, security, or commodity can be acquired. This rate is most commonly available for items that are bought and sold through an organized exchange, where there are many willing buyers and sellers. In an active market, the spot rate may change frequently. The spot rate actually reflects the price at which the traded item will be delivered to the buyer, which may be one or more days in the future.
Traders use the spot rate as the basis for deriving forward prices, into which are incorporated future supply and demand expectations, as well as the interest rate.
How to Access Spot Rate Information
Spot rate information for many types of commodities are compiled and distributed by various information services, such as Bloomberg and ThomsonReuters. This information can be accessed online, usually on a subscription basis.
Terms Similar to Spot Rate
The spot rate is also known as the spot price.