How to Add - Cash market Index Data in MetaTrader5 | MT5 |
A cash market is a marketplace for the immediate settlement of transactions involving commodities and securities. In a cash market, the exchange of goods and money between the seller and the buyer takes place in the present, as opposed to the futures market where such an exchange takes place on a specified future date. This type of market is also known as the spot market, since transactions are settled on the spot.
BREAKING DOWN 'Cash Market'
Cash market transactions can take place on either a regulated exchange or over the counter (OTC). In contrast, transactions involving futures are conducted exclusively on exchanges, while forward transactions, such as currency forwards, are generally executed on the OTC market. For a specific commodity, the price in the cash market is usually less than its price in the futures market. This is because there are carrying costs, such as storage and insurance, involved in holding a commodity until it can be delivered at some point in the future.
An Example of a Cash Market
The New York Stock Exchange (NYSE), using a real-world example, is a regulated cash market in the United States. The NASDAQ would also be considered a cash market. Therefore, there can be more than one cash market within an economic region.