Spot Transaction

A spot transaction is a purchase or sale of one currency for another, for delivery usually two business days after the dealing date (the date on which the contract is made).

Business days do not include Saturdays, Sundays or bank holidays in either of the countries of the two currencies concerned.

Examples:

  • If a spot deal is made on Monday, delivery (value date) will be two days later on Wednesday.
  • If a spot deal is made on Friday, delivery will be two business days later on Tuesday.
  • If the spot date falls on a public holiday in one of the countries of the two currencies involved, spot settlement is deferred and the next working day is taken as the value date. This must be the case, because settlement in any currency takes place in that currencies country of origin. For example, if a spot USD/EUR deal is transacted on Tuesday 26 November, it would be normally be for value on Thursday 28 November. However, if this date is a holiday in Germany or the US all USD/EUR spot transactions booked on Tuesday 26 November will be for value Friday 29 November.

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