Randy Moss is one of the greatest wide receivers of all time. And Randy Moss will never be seen at any futures market anywhere in the world. That’s because if Randy Moss wants something, he prefers one means of settlement.
“Straight cash, homey.”
The cash market is the opposite of a futures market. Transactions between buyers and sellers are completed immediately, in real time at the cash or “spot” price.
The general perception of a public cash market is always centered on the commodities markets. People have images of buyers and sellers exchanging agricultural commodities in Chicago. The reality is that the largest cash market in the world is the New York Stock Exchange, since equities are bought and settled two days after the day of the trade’s execution.
Now, go deep.
Related or Semi-related Video
Finance: What is a Money Market Fund?80 Views
finance a la shmoop. what is a money market fund? isn't it a strange concept
to think about going to a market to buy money? [man walks through grocery store]
well yeah it's strange but the practice exists and it's a huge multi trillion
dollar market today. the key word here is money and not investment. why such a big
diff? well because the notion of investing implies duration. that is when
you invest in a nice fixer-upper home or a tractor distribution company or shares
in a fat dividend-paying bank you're investing for presumably a long time [people stand in line]
like years maybe decades maybe centuries if you can find the right miracle pill.
but here we're talking about money like the stuff you can buy candy with. so it's
short term not long and a money market fund basically comprises many series of
pretty safe bonds that are all coming due in the next 30 to 90 days. sometimes [pie chart]
longer than that sometimes shorter but generally in the very near future. so why
would you care about a money market fund? well because it pays you slightly more
interest on your money than say a bank checking account. and lots of people in
corporations need cash just sitting around to pay their bills, so there are
tons of money market funds out there available and that's the gist of a money
market fund. we're sure you'll have plenty of experience with them by the
time you hit your sixth hundredth birthday day [people cheer and hold birthday cake]
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