Spot Price | How to Calculate the Spot Price with Example (2024)

FAQs

How to calculate the spot price? ›

There is no mathematical formula for expected spot price. It is more of an economic concept rather than a mathematical part. At any point in time, forces of demand and supply play an essential role in determining the market price. For accounting purposes, this will be reasonably uniform worldwide.

Example of a spot price

In forex, the spot price is sometimes referred to as the spot rate, and it is the quoted exchange rate between two currencies in a forex pair. For example, if the quoted exchange rate for EUR/USD was $1.2354, then that is also the spot rate.

The formula is expressed as P V = F V ( 1 + S p o t R a t e ) n , where PV is the present value, FV is the future value, SpotRate is the interest rate used to discount a single future cash flow back to the present, and n is the time period for which the future cash flow is discounted.

If you hold a risk-free asset which incurs carrying costs: S₀ = [S_T - FV (CB, 0, T)]/(1 + r)^T: the spot price is the future spot price minus the future value of the carrying cost, all discounted to the present.

A spot rate or spot price is the real-time price quoted for the instant settlement of a contract. A spot rate in the commodities market indicates an immediate need for a commodity, with a delivery date usually falling within two business days of the trade date.

Spot price is the current price at which you can buy or sell an asset for immediate delivery and settlement. Also called the cash price, spot prices typically fluctuate throughout the day due to changing supply, demand, and expectations.

Basis is the price difference between cash (spot) and futures price. In the case of equity index products, there is a cost of carry consideration that determines whether the futures price trades at a discount or a premium to spot.

Spot price is the price traders pay for instant delivery of an asset, such as a security or currency. They are in constant flux. Spot prices are used to determine futures prices and are correlated to them.

What Is a Spot Market? The term spot market refers to the place where financial instruments are traded for cash for immediate delivery. Assets traded in the spot market include commodities, currencies, and securities. Delivery occurs when the buyer and seller exchange cash for the financial instrument.

Proof of the forward price formula

So of course they will have to settle on a fair price or else the transaction cannot occur. An economic articulation would be: (fair price + future value of asset's dividends) − spot price of asset = cost of capital. forward price = spot price − cost of carry.

How do you calculate change in spot price? ›

If you are tracking a price increase, use the formula: (New Price - Old Price) ÷ Old Price, and then multiply that number by 100. Conversely, if the price decreased, use the formula (Old Price - New Price) ÷ Old Price and multiply that number by 100.

Calculate Selling Price Per Unit

Divide the total cost by the number of units bought to obtain the cost price. Use the selling price formula to find out the final price i.e.: SP = CP + Profit Margin.

The exchange rate between two currencies that is anticipated to prevail in the spot market on a given future date. It differs from the current spot rate primarily by the extent to which inflation expectations in the two currencies differ.

Cost Per Point Formula

To calculate the cost per point, divide the advertising/media cost by the number of point.

The spot rate reflects real-time market supply and demand for an asset available for immediate delivery. The spot rates for particular currency pairs, commodities, and other securities are used to determine futures prices and are correlated with them.

What is a Spot Price? The spot price is the current market price of a security, currency, or commodity available to be bought/sold for immediate settlement. In other words, it is the price at which the sellers and buyers value an asset right now.