Cash Market vs Future Market

Cash Market vs Future Market

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. 

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.

Cash Market 

Future Market

                                           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
                                           Purpose
For buying trades and shares in the market For speculations and hedge risk
                                                      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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