When trades are taken and settled instantly, it is known as spot trading in the Indian stock market.
It is necessary that, these traders are booked on the spot and not on a date in the future.
In order to carry out a spot trade, a number of trading strategies are available in the market.
Your broker can also provide trading tips in order to make profit in spot trading trades.
Spot trading can be carried out in stock, currency and commodity trading.
A cash trade is another terminology used for this kind of trading.
Trading in commodities is nothing but trading in physical commodity in the spot market at the current price in the market.
The delivery price of the commodity that is priced at present in the spot exchange platform is the same as when you pay by cash and get the commodity delivered.
What is a Spot Exchange?
Here, in the spot exchange, the traders get a better price and the buyers get it for a much lowered purchase cost.
It makes a good deal for both the parties that are involved in the transaction as a large number of contributors are involved.
As there is no middle man involved in this process, it saves on any price rise due to the same.
There is transparency involved improving the efficiency and offers best price.
An account has to be opened with a reputed brokerage firm, in order to do spot trading.
The brokerage firm will guide through the process and enable trading in spot market.
What are the benefits of spot trading?
1.A lot of benefits can be availed by both the buyer and the seller.
2.The negotiation between both the parties is competitive as large numbers of buyers start the price war and hence offer the best price to both the buyers and sellers.
3. It is an accurate system which is transparent and regulated. The fear of illegal transactions can be avoided.
4.The items are handled and stored in good condition; hence the buyers can expect standard quality.
5.Arbitrage prospect is open.
6.Technological advancement enables quicker transactions.