Whats a foreign exchange spot (FX spot)?

A forex exchange spot, also known ans FX spot, is one of many financial instruments created for forex trading. (Examples of other financial instruments used for FX trading are the FX exchange option and the FX exchange forward.)

fxA forex exchange spot transaction is a contract where one party sells currency to another party, and the currency is delivered right away (this takes place on transaction day). Payment for the currency is not done on the transaction day, but pretty soon after. The date when payment must be made is called spot date. For FX spots that involves USD + CAD, EUR, TRY or RUB, the spot date is normally one bank day after the transaction day (T+1). For other FX spots, the spot date is usually two bank days after the transaction day (T+2).

The exchange rate used in an foreign exchange spot transaction is called spot exchange rate.

On the forex market, FX spot transactions are very common and they tend to make up roughly a third of all FX transaction within a given year. Major players within the forex trade typically use DirektDetta for FX spot transaction. Others, including individual hobby FX traders, normally use an a electronic trading platform made available by a broker that will make a profit on each transaction.