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Cash market is a marketplace where the immediate settlement of commodities takes place in this market between the purchaser and the seller. This is also known as spot market cash market transactions take place over the counter or in a regulated exchange in contrast transactions take place exclusively on exchange. The price of the cash market is usually less than the futures market this market has two day delivery period due to the time duration to move cash from one place to another.



In this market most speculative retail trading is done as spot transactions are on an online platform in this market the moral context speculation is considered negatively. Then there is also a part of this market known as the energy spot market where surplus energy producers instantly spot purchasers or buyers for energy and negotiate prices within milliseconds and deliver the energy. In this market, securities are traded in a possibly changing current market place.
Cash market is different from the future market in that delivery takes place immediately. So, if you wish to purchase Company ABC shares and own them immediately, you should go for the cash market on which the shares are traded If, however, you want to buy a contract that entailed taking possession of Company ABC shares, you should seek out the futures exchange on which the shares of ABC company trade.
The difference between cash and future markets are that Cash markets are for supply and demand, whereas futures markets are also influenced by expectations about  the prices later, storage costs, weather predictions (for perishable commodities in particular), and other factors also influence the future market. This market is important for companies because it allows companies with temporary cash to invest in short term securities companies with a shortage of cash then the market acts as a repository for short term funds large companies generally handle their own and take participation in the market through dealers.

For more about the stock market read Alliance Research BLOGS.

Comments

  1. Phani Kumar18 March 2020 at 02:36

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