The spot price is the current market price at which the asset can be transacted for immediate delivery. It reflects real-time supply and demand and can move intraday as trades occur and new information comes in.
In futures and forward contracts, the spot price serves as the reference price for valuation and settlement. For cash-settled products, the payoff depends on the difference between the contract's price and the prevailing spot price at settlement. The relationship between the futures price and the spot price—often called the basis—can reflect carry costs, financing, storage, and convenience. Traders monitor the spot price to gauge current value of the underlying asset and to understand how prices in the derivatives market might adjust as market conditions change. Data sources include exchange feeds and credible pricing services, and the spot price is typically quoted in the asset's standard unit and currency.
On a given day, the spot price of crude oil is $70 per barrel, while nearby futures contracts trade near that level, illustrating how the spot price informs futures pricing.
Futures contract · Forward contract · Underlying asset · Settlement price · Price discovery · Basis · Cash settlement