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What is a spot date?

Spot date

This is the day on which the funds involved in a spot transaction are transferred. With a contract to buy or sell a commodity or currency straight away, the spot date is normally two working days after the deal is agreed.

Where have you heard about spot dates?

You’ll typically hear about a spot date in the foreign exchange market as it's the day on which a currency must be delivered to the buyer. It’s often used to distinguish it from a transaction that isn't settled immediately, such as a futures contract or a forward contract.

What you need to know about spot dates.

On the transaction date, the two parties involved agree on the number of currency units and value of the transaction in both currencies. If both are to be delivered, bank details will also be exchanged.

The spot date isn’t always two working days after the trade date. An exception to the rule is the US dollar and Canadian dollar currency pair, which are settled on the next business day because they're commonly traded together and their financial centres are in the same time zone.

Forward foreign exchange transactions settle on any business day that is past the spot date.

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