Spot Market, also known as the cash market, is a platform where financial instruments such as stocks, commodities, or currencies are traded for immediate delivery and payment. Unlike the futures or derivatives market, transactions in the spot market are settled “on the spot,” meaning buyers pay and take ownership of the asset right away, typically within two business days.

In the Indian financial ecosystem, the spot market plays a vital role in determining real-time prices based on current demand and supply. Prices in this market are often referred to as spot prices — the current market value of an asset. These prices serve as a benchmark for futures contracts and help traders, investors, and institutions make informed decisions.

The spot market can be classified into two main types: over-the-counter (OTC) and organized exchanges. In OTC markets, transactions occur directly between parties without a centralized exchange, offering flexibility but less transparency. On the other hand, organized exchanges such as the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) provide regulated environments with standardized trading processes, ensuring price transparency and investor protection under SEBI’s supervision.

For investors, the spot market is an essential avenue to buy and sell assets based on current market conditions. It reflects the true value of an asset and helps participants manage liquidity or hedge against price volatility. However, it is crucial to understand market dynamics, perform due diligence, and make informed decisions in compliance with SEBI guidelines.

In summary, the spot market serves as the foundation of the financial system — providing transparency, efficiency, and real-time price discovery — making it an indispensable part of both retail and institutional trading strategies.