Spot rate
The spot rate (also spot price ; English spot price ) is the market price of a financial instrument or commodity in cash transactions on the spot market . The opposite is the forward rate .
General
Spot prices belong to the stock exchange prices in addition to the variable prices (continuously quoted prices) and the forward prices . Spot prices are one of the most important market data that is of interest not only to market participants but also to the general public . In stock trading on the stock exchange , however, they no longer play a role, since the variable prices and their closing price apply to all share transactions. If you multiply the spot rate by the unit ( nominal value or number of pieces ) of the underlying , you get the market value .
species
Spot rates there are in securities and foreign exchange ( financial instruments ) and for example in raw materials such as coffee (or other commodities , so-called English " Commodities " ). Since January 2001 there have been no spot prices for continuously quoted shares in Germany . By May 2011, the spot price was - even single price mentioned - yet for all securities orders prevail that a certain number of items, the minimum lot , did not reach. Since then, the minimum limit for shares has been abolished; for bonds , it is based on the minimum investment amount. As a result, the spot price for shares is no longer relevant. The German Bundesbank intervened with the government bonds once a day during the price determination of the spot rates ( english " Fixing " ) 11:00 to 13:00. This ensures the highest possible market liquidity in all government bonds. Security orders for federal bonds must be received in the order book of the lead broker at the latest by the time the unit price is determined .
In the case of foreign exchange, however, the spot rate plays a decisive role. The spot rate is composed of a lower bid price ( English bid ), a higher ask price ( English ASK ) and an intermediate middle rate ( English mean rate ). The latter is determined as part of the price determination, with the bid and ask prices resulting from the application of the fixed rate ranges . Official spot exchange rates were determined on the Frankfurt foreign exchange exchange until December 1998 (spot mean rate), since then there have been current spot rates exclusively in over-the-counter interbank trading .
Spot rate as reference rate
In the case of foreign exchange swaps , the spot exchange rate forms the reference rate for determining the swap rate . Since spot and forward rates generally do not match, the swap rate is calculated as the relative difference between the forward rate and the spot rate in relation to the spot rate. The spot rate together with the forward rate thus forms the basis for forecasting the future price development of an underlying asset . If the difference between the spot rate and the forward rate greater than the swap rate, open up arbitrage opportunities - which, however, when goods by accumulating storage costs are limited.
International
Internationally as in Germany, the spot rate is the counterpart to the forward rate. It is to be used in the EU member states for spot foreign exchange transactions that have to be completed two working days after the transaction. Exceptions are in particular the currency pairs USD / CAD or USD / RUB , which have to be fulfilled 1 working day after the transaction. Spot prices are also available on Anglo-Saxon bond markets and for commodities , for example on the London Metal Exchange and the New York Mercantile Exchange for base metals and for energy on the European Energy Exchange .
Cash register
Analogous to the spot rate refers to the cash rate , or spot rate ( English spot rate ) the interest rate that is paid with immediate borrowing or unit on the market. This usually depends on the term of the borrowing or investment. A yield curve is defined by the spot rates for the different terms . From this, forward interest rates such as the investment of money in one year for three years can be calculated.
In the case of financial investments with fixed repayment and, if applicable, interim interest, the cash value of the investment can be calculated using the cash yield curve , which corresponds to the spot rate. Conversely, with tradable forms of investment (e.g. bonds , promissory note loans ), a spot rate can be derived from their spot rate.
Individual evidence
- ↑ a share can also be traded continuously
- ↑ Mike Rinker, Conclusion of Contracts in the Exchange Electronic Trading System , 2004, p. 139 f.