In finance

Finance

"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...

, the spot date of a transaction is the normal settlement day when the transaction is done today. This kind of transaction is referred to as a spot transaction or simply spot.

The spot date may be different for different types of financial transactions. In the foreign exchange market

Foreign exchange market

The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...

, spot is normally two banking days forward for the currency pair traded. A transaction which has settlement after the spot date is called a forward or a forward contract

Forward contract

In finance, a forward contract or simply a forward is a non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed today. This is in contrast to a spot contract, which is an agreement to buy or sell an asset today. It costs nothing to enter a...

.
Other settlement date

Settlement date

Settlement Date is a securities industry term describing the date on which a trade settles. That is, the actual day on which transfer of cash or assets is completed....

s are also possible. Standard settlement dates are calculated from the spot date. For example, a one month foreign exchange forward settles one month after the spot date. I.e., if today is 1 February, the spot date is 3 February and the one month date is 3 March (assuming these dates are all business days). For a trade with two dates, such as a foreign exchange swap

Forex swap

In finance, a forex swap is a simultaneous purchase and sale of identical amounts of one currency for another with two different value dates .; see Foreign exchange derivative.-Structure:...

, the first date is usually taken as the spot date.

See also

• Foreign exchange spot trading
  Foreign exchange spot trading
  A spot foreign exchange transaction, also known as FX spot, is an agreement between two parties to buy one currency against selling another currency at an agreed price for settlement on the spot date...
  
  
• Foreign exchange date conventions
• Day count convention
  Day count convention
  In finance, a day count convention determines how interest accrues over time for a variety of investments, including bonds, notes, loans, mortgages, medium-term notes, swaps, and forward rate agreements . This determines the amount transferred on interest payment dates, and also the calculation of...
  
  
• Business date conventions
  Date rolling
  In finance, date rolling occurs when a payment day or date used to calculate accrued interest falls on a holiday, according to a given business calendar. In this case the date is moved forward or backward in time such that it falls in a business day, according with the same business calendar.The...
  
  
• International Monetary Market date conventions
  International Monetary Market
  The International Monetary Market , a spin-off from the old Chicago Mercantile Exchange and largely the creation of Leo Melamed, is today one of three divisions of the Chicago Mercantile Exchange , the largest futures exchange in the United States and the second largest in the world after Eurex,...