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konstantinos2000 t1_jdzgh0h wrote

What does spot price exactly mean?

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Eco_guru t1_jdzi23x wrote

It means that it’s the cost of a one time move at current market rates that a person or company would pay, basically the cost to book with no discounts for volume or contractual rates

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KutteKiZindagi t1_je0avvn wrote

On the spot price. Lets assume you want to move some shit from china to US today. You get the quoted price and you pay to move it.

Long term contracts are for regular shippers to ship in future.

The shipping price is in "contango" which means the long term contract price is higher than current price. Which means the market expects the shipping price to rise in the future.

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Equivalent-Half-964 t1_je38c2v wrote

It does not mean that the market expects the shipping price to rise in the future, that's not what futures do. It means the spot price is carried at a positive rate into the future, as a no-arbitrage price, accounting for costs and income in holding the contract.

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