The "spot price" refers to the current market price at which a specific asset—such as a commodity, financial security, or currency—can be bought or sold for immediate delivery. Unlike futures prices, which apply to transactions set for a later date, the spot price reflects real-time supply and demand dynamics in the market. It serves as a benchmark for immediate trading and helps participants understand the value of an asset at a given moment.
In the context of specific markets, such as energy or emissions trading, the spot price plays a critical role. For instance, in the European Union Emissions Trading System (EU ETS), the spot price of European Union Allowances (EUAs) reflects their current value for compliance or investment purposes. This price informs decisions for entities required to offset their greenhouse gas emissions and for traders speculating on price movements.
Understanding the spot price is essential for investors, traders, and businesses, as it offers a snapshot of current market conditions and influences strategic planning and financial decision-making.