It’s the market you need to dip into if you need something now.
You find out that your fiancé has fallen in love with someone else while backpacking in Europe. You need to get on the next flight to Paris to try to win them back. You are now in spot market for plane tickets. You’re going to pay whatever the rate is for that particular flight leaving almost immediately.
The spot market sits in opposition to the futures market, where assets can be bought for delivery on some future date. There’s only one price from the spot market, because you need delivery right now. However, if you're more flexible about when you need something, you could shop around for different prices. If you could leave for Paris anytime this summer, you could shop for a departure time that had a cheaper price.
The term "spot market" comes up a lot in commodity and currency trading. For those items, there are futures and options markets, with contracts expiring in the future. And there's a spot market, which involves immediate delivery.
It also comes up for financial instruments. Again, there's a spot market for immediate delivery (the regular stock market is a spot market). Meanwhile, there's a separate futures and options market for contracts with forward dates.
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Finance: What are Payday Loans?25 Views
finance a la shmoop what are payday loans well this you want to stay away
from payday loans if you are so strapped for cash [girl gives out payday candy bar]
that you need to borrow money to pay the rent and you only have the promise of [hand takes money and leave I.O.U. sticky note]
your future paycheck to borrow against well something has clearly gone wrong [girl looking through papers]
along the way and you shouldn't trust the snazzy-looking television [TV add for loans]
commercials you're seeing out there a payday loan is a loan using the promise
of delivery of cash on your payday cheque as collateral and for most
companies loaning money on payday this is an extremely profitable business
because they quote only charge you 2% unquote for the loan but let's do the
math you're getting the cash two weeks early and last time we looked at a
calendar there were 52 weeks in a year or 26 bimonthly pay periods so if
they're charging you 2% to lend you money for one of those bimonthly pay
periods well their annualized rate that they're charging you for lending you
that money well that's 52 percent a year right 26 times 2% it's 52 percent a year
even the worst credit cards charge dramatically less than this rate of
interest so how do payday loan places get away with such high rent on your
hard-earned money well if you have to borrow money in this form with such
urgency well you're likely a very bad credit [woman sends man out to pay grandma]
risk and the perceived odds of you simply vanishing are well they're high [man gets into car with suitcase]
and the odds you are financially unsophisticated are almost by definition
certain because if you did do the math you get even an expensive credit card to
float you the thousand bucks or whatever your paycheck was or five hundred
dollars for that half month period to just get by until the next month right
so if you ever find yourself needing a payday loan let's hope you can work a
few long weekends saving enough money so that you don't need these things anymore [man working on computer]
and next time well you know what they say stay in school [school kids collaborating on project]
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NYMEX, or the New York Mercantile Exchange, is an exchange where commodities are regularly traded.