spotposition

Spot position refers to the net quantity of a financial instrument or commodity that an individual or institution holds in the spot market for immediate delivery. It represents current exposure and is calculated as the sum of all long spot trades minus short spot trades. A long spot position indicates ownership of the asset; a short spot position indicates a contractual obligation to deliver the asset.

In practice, firms monitor spot positions by instrument and by counterparty, and they may report net exposure across currencies or asset classes. Spot positions are distinct from forward, futures, or options positions, which involve delivery at a future date and may carry different pricing, margin, and settlement requirements. Settlement cycles for spot trades vary by asset class and market, but are generally short, often within a few business days after trade date.

Spot positions are used in risk management and regulatory reporting to assess current price risk and credit exposure. Mark-to-market valuations reflect changes in the spot position’s value as market prices move. Carry costs or benefits, such as convenience yield in commodities, can also influence the profitability of holding a spot position.

Examples: a trader who buys 1,000,000 USD worth of spot euros has a net long euro spot position; if subsequent spot sales reduce the holding to 600,000 USD, the position is trimmed accordingly. Understanding spot positions helps clarify immediate market exposure versus future-oriented hedges.