Cash Market Meaning
A cash market is referred to as a marketplace in which financial tools like commodities and securities are purchased and received in exchange for cash. Cash markets are also known as spot markets as the transaction is settled on spot.
Cash market transactions can be conducted either in a regulated environment such as a stock exchange or on some over the counter transactions that are deemed as unregulated.
Future Market Meaning
Future Market is a commerce marketplace where the future agreements are purchased and sold. The word futures contract implies an agreement which is performed in the prospect.Â
It is an agreement between 2 parties in which 1 party gives his or her consent to purchase a particular amount of a good or financial tool at a consented cost price and shipment of the material is done at a succeeding date (pre-specified) in prospect.
Also Check: Difference between Primary Market and Secondary Market
This article is a ready reckoner for all the students to learn the difference between the cash market and the future market.
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Cash Market |
Future Market |
| Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Definition | |
| A cash market is referred to as a marketplace in which financial tools like commodities and securities are purchased and received in exchange of cash | Future Market is a commerce marketplace where the future agreements are purchased and sold |
| Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Purpose | |
| For buying trades and shares in the market | For speculations and hedge risk |
| Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Ownership of shares | |
| As long as anyone holds the shares, he/she can be regarded as shareholder | There is no option to become shareholder |
The above mentioned is the concept, that is elucidated in detail about ‘Difference between the Cash market and Future market’ for the Commerce students. To know more, stay tuned to BYJU’S.
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