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Introduction
- Spot exchanges are platforms which facilitate the purchase and sale of specified commodities, including agricultural commodities, metals, and bullion by providing spot delivery contracts (provides for the delivery of goods and the payment of the price) in these commodities.
- There are four-spot exchanges currently operating in the country. These exchanges are: National Spot Exchange Ltd (NSEL), NCDEX Spot Exchange Limited, Reliance Spot Exchange Limited, Indian Bullion Spot Exchange Limited.
Advantages of Spot Exchange
- Spot exchanges create a National Market.
- Spot exchanges show overall demand-supply of commodities.
- They eliminate the middleman.
Spot Exchange Rate
- The spot exchange rate is the current market price for exchanging one currency for another.
- Generally, the spot rate is set by the forex market.
- Some countries actively set or influence spot exchange rates through mechanisms like a currency peg.
- Currency traders follow spot rates to identify trading opportunities not only in the spot market but also in futures, forwards, and options markets.
