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What is Spot Price, and how is it calculated??

cjmezzcjmezz Posts: 467
in Precious Metals
Stole this topic from another site, but don't know the answer myself and thought it might spark some good discussion:

So...what is spot price and how is it calculated? Discuss:
"When someone tells you nothing is impossible, ask them to dribble a football"

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Comments

  • rickoricko Posts: 98,724 ✭✭✭✭✭
    The spot price or spot rate of a commodity, a security or a currency is the price that is quoted for immediate (spot) settlement (payment and delivery). Spot settlement is normally one or two business days from trade date. This is in contrast with the forward price established in a forward contract or futures contract, where contract terms (price) are set now, but delivery and payment will occur at a future date. Spot rates are estimated via the bootstrapping method, which uses prices of the securities currently trading in market, that is, from the cash or coupon curve. The result is the spot curve, which exists for each of the various classes of securities.

    Courtesy of Wikipedia.... Cheers, RickO
  • derrybderryb Posts: 36,793 ✭✭✭✭✭
    How Is Gold Spot Price Determined?

    "Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey

  • Timbuk3Timbuk3 Posts: 11,658 ✭✭✭✭✭
    Interesting information.
    Thanks !!!
    Timbuk3
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