Spot Contract

Definition

Spot Contract. A contract relating to a transaction which is for immediate settlement.

Further Notes

A spot transaction simply means a transaction in which some goods or currency are exchanged for some other goods or currency, with no future delivery provision. A Spot contract is the usually unwritten contract which by definition underlies that kind of transaction. Spot means for immediate settlement. Immediate here means the minimum number of days that are possible. This includes general retail transactions as well as the specialized types of spot transaction found in the financial services and treasury trading contexts, such as Fx Spots (a sub type of this) and commodity spot transactions.

However the settlement date is still some time in the future. Also given different time zones, the settlement would be at some time in the future anyway. Formerly a financial e.g. currency Spot would have been 2 (working) days settlement for example. Canadian v USD would be 1 day. Follows a settlement convention from the relevant market.

See Also

• Settlement Convention

Disclaimer

This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with, or correctly interprets, the concepts covered by the FIBO ontology.