#SpotVSFuturesStrategy Spot trading refers to the direct purchase or sale of financial assets where the transaction settles “on the spot,” or almost immediately, at the current market price.

This type of trading is common across various markets, including stocks, commodities and forex, where assets are exchanged with minimal delay. Unlike transactions involving contracts, spot trading involves the actual transfer of ownership, meaning the buyer receives the asset quickly, typically within one to two business days.

Spot prices are continuously updated based on real-time supply and demand, which can make spot trading a good fit for investors who want to capitalize on short-term price movements or access immediate market liquidity. Futures trading involves contracts where two parties agree to buy or sell an asset at a predetermined price on a specific future date. Unlike spot trading, there’s no immediate exchange of the asset; instead, the agreement is binding, with the trade settled when the contract expires.

Futures contracts cover a wide range of asset classes, such as commodities, indices and currencies, allowing traders to speculate on price movements or secure a fixed rate. This can be especially useful for businesses aiming to manage costs.