What is the spot price?

The commodities markets are more complicated than many people realize, but the concept of the spot price is one of the simplest to understand in the industry. Put simply, if you want to buy a commodity on the spot -- rather than waiting until some point in the future -- then the spot price is what you'll pay right now to obtain that commodity.

Is the spot price equal to my electricity price?

The spot price is not equal to your electricity price – even with a variable contract. There are a lot of other factors involved. In addition to the actual price of the electricity, you pay subscription fees to the electricity company, energy taxes, VAT, energy transport costs and more.

What is the difference between a spot price and futures price?

In particular, the difference between the spot price of a commodity and the price of futures contracts covering the same commodity plays a major role in defining how a particular commodity market behaves. Let's take a closer look at what a spot price is and why it's important in the commodity futures markets.