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Spot Markets

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Spot markets
Related: Cash markets

Spot Market
A market in which an asset bought or sold is delivered immediately. To give a basic example, if one buys a stock and it is delivered immediately, one utilizes the spot market. It differs from derivatives markets like futures. Perhaps less commonly, it is called the cash market.


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This switch from backwardation to contango indicated ample inventories relative to demand in the spot markets.
Conversely, the derivatives markets reduce spot market volatility by providing low cost contingent strategies and enabling investors to minimise portfolio risk by transferring speculation from spot markets to futures markets.
At present, the only spot markets for Asian crude oils are limited to Dubai crude oil as a pricing marker for sour crude oils, and Tapis (Malaysia) as a pricing marker for sweet crude oils.
 
 
 
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