Spot trading is the process of buying and selling financial instruments (such as stocks, cryptocurrencies, commodities, or forex) for immediate delivery and settlement. This means that the transaction happens "on the spot," with the buyer receiving the asset and the seller receiving payment right away.

Key Features of Spot Trading:

Immediate Settlement: Unlike futures or options contracts, spot trades are settled instantly or within a short period (T+2 for stocks, for example).

Market Price: Trades occur at the current market price, which fluctuates based on supply and demand.

Ownership Transfer: The buyer gains full ownership of the asset immediately after purchase.

Where Spot Trading Occurs:

Stock Exchanges (e.g., NYSE, Nasdaq)

Cryptocurrency Exchanges (e.g., Binance, Coinbase)

Forex Markets (for immediate currency exchange)

Commodities Markets (for physical gold, oil, etc.)

Would you like to compare spot trading with other types, like futures trading?