The cash market, also known as the spot market, is a marketplace where financial instruments or commodities are traded for immediate delivery and settlement. Prices in the cash market reflect the current supply and demand, as opposed to futures markets where delivery occurs at a later date. Traders often compare cash market prices with futures prices to identify arbitrage opportunities or gauge market expectations about future price direction.
Example
“Gold was trading at $1,950 in the cash market while the futures contract implied a price of $1,965, reflecting a contango structure.”