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What is the difference between spot and future trading ?

April 26, 2017difference future spot trading

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What is the difference between spot and future trading ?

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Say a jeweler requires 100 gms of gold 3 months from now. He goes to gold smith and buys and takes delivery of the consignment (gold) at the quoted price. This is spot transaction. If the same jeweler opts for a 3-month exchange traded future contract, he buys a future contract in gold at a price decided today but agrees to take delivery at a future date.