We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is a Cash Market?

Malcolm Tatum
Updated Feb 04, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

The cash market is a buying strategy in which the buyer makes an immediate payment that is equal to the current market price for commodities and other types of securities. Upon the receipt of the payment, the seller relinquishes all claims to the property and bestows ownership upon the buyer. In a sense, any type of retail transaction such as the purchase of groceries could be included in this definition, as the goods are received by the buyer upon rendering a cash payment for the products.

One of the characteristics that sets the cash market apart from a futures market is this immediate satisfaction and transfer of ownership. Futures markets involve a longer period for the transaction to be considered complete. With a cash market, the investor immediately assumes ownership and is free to do with the commodity or security as he or she wishes. While both approaches are capable of helping an investor realize a return on an investment, the cash approach may offer a level of speed and excitement that will attract investors who prefer to be constantly on the move with the investment portfolio.

This market is also called the spot market. Spot markets get their name from the fact that business deals are initiated and completed on the spot, rather than requiring an extended period of time to resolve. They tend to be somewhat fast paced, since the turnaround time on a transaction is so short. Many investors may purchase a commodity in the morning, see a rise in the value by this afternoon, and sell before closing and make a significant profit.

Many physical commodities, like metals, are bought and sold in this type of market. Grains, like corn or wheat, can be sold this way as well. Even meats, such as pork bellies, can be exchanged in this way. In addition, some securities as well as some underlying equities and bonds may also be sold in a cash market environment

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including WiseGeek, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
By golf07 — On Jul 04, 2012

I know that gold and silver are traded in a cash market, and wish I had taken advantage of this several years ago when the prices were much lower than where they are now. It is interesting to watch how different personalities are drawn to different kinds of investments.

I worked for several years in an investment department, and as a rule of thumb, most of the older investors were much more conservative than the younger ones.

There was one older gentleman I remember who enjoyed trading the cash market. He had done this for many years and was quite successful at it. Others I know have tried this type of investing and didn't feel comfortable with it at all.

Before investing in any kind of market, you have to know what your risk level is, and where you feel comfortable investing your hard earned dollars.

By LisaLou — On Jul 04, 2012

I grew up surrounded by agriculture and remember my grandparents and parents closely listening to the prices of grain and hogs. The price of corn or soybeans was a normal part of their daily conversation.

As far as I know, none of them actively took part in trading the market. They did make their living on what the prices of these commodities were. They kept up with what the current prices were, and where they thought they might be in the future, but never actively traded them.

Because of my background, I have always been interested in stocks and commodities. I like the fast paced environment of the commodities market, and many times have thought about getting involved with buying and selling in a cash market.

By bagley79 — On Jul 03, 2012

I have been investing in the stock market for several years, but have never felt comfortable trading in a cash market. I am a very conservative investor and will buy a stock and intend to hold on to it for quite awhile.

I can understand how some people enjoy the ever changing prices of the cash market, but I don't think I would be able to sleep very well at night if I invested this way.

Buying and selling stocks has a fair amount of risk, but the cash market seems even more so. I would also think if you did this several times a day or week, the price of commissions you would pay on these transactions would add up quickly.

By honeybees — On Jul 02, 2012

I traded commodities in a cash grain market for a short amount of time. I allowed myself a certain amount of money to try this, and needless to say, it didn't take me very long to lose my money.

I know a few successful commodities brokers who buy and sell in the cash market all the time, but I found this too volatile for me. I have also heard of people who were very successful at this for a period of time, and then ended up losing everything.

It was a good learning experience for me. I still like to listen to the prices of certain commodities, but when it comes to trading them, I leave that to someone else.

By anon160654 — On Mar 16, 2011

anon27262 -- i don't think so, how can you sell in the cash market what you don't actually own? you own the futures of the equity, not the actual equity. cash market = actuals.

By anon31466 — On May 06, 2009

What is the discounted price here?

By anon27262 — On Feb 25, 2009


can somebody buy the futures of a equity trading at a discount say 90 and sell the same in cash market which is trading at say 100, to make profit of that discounted price?

Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.