Glossary entry

Spot rate

The spot rate is the exchange rate for converting currency now, or within a very short settlement period, usually a couple of working days. Most ordinary transfers are priced at a spot rate plus the provider's margin. It contrasts with a forward rate, which is agreed today for an exchange on a future date. Because the spot rate changes through the day, a quote is only comparable with another quote taken at the same moment for the same amount. See also: forward contract, exchange rate, rate lock, and the guide How Exchange Rates Work.