Cash Market

Cash Market

The marketplace for immediate settlement of transactions involving commodities and securities. In a cash market, the exchange of goods and money between the seller and the buyer takes place in the present, as opposed to the futures market where such an exchange takes place on a specified future date.

Also known as the spot market, since such transactions are settled "on the spot."

Cash market transactions can take place either on a regulated exchange or over-the-counter (OTC). In contrast, transactions involving futures are conducted exclusively on exchanges, while forward transactions, such as currency forwards, are generally executed on the OTC market.

For a specific commodity, the price in the cash market is usually less than its price in the futures market. This is because there are carrying costs, such as storage and insurance, involved in holding a commodity until it can be delivered at some point in the future.


Investment dictionary. . 2012.

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  • cash market — /kæʃ mɑ:kɪt/ noun the gilt edged securities market (where purchases are paid for almost immediately, as opposed to the futures market) …   Dictionary of banking and finance

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  • fair cash market value — Terms cash market value , fair market value , reasonable market value or fair cash market value are substantially synonymous. Fort Worth & D. N. Ry. Co. v. Sugg, Tex.Civ.App., 68 S.W.2d 570, 572 …   Black's law dictionary

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