Cash Price

The Cash price (or spot price) of a commodity or financial instrument is the price for immediate
delivery.
The Cash market (or spot market) is the market where commodities or financial instruments are
traded for immediate delivery.
In reality, "immediate" delivery can be 2 or 3 days later.
Spot-Futures Parity
The relationship between spot prices and futures prices that must hold to prevent arbitrage
opportunities is known as the spot-futures parity condition.
The equation for the spot-futures parity relationship is:
Futures Price = Spot Price (1 + Risk-Free Interest Rate Income Yield)
In the equation, F is the futures price, S is the spot price, r is the risk-free rate per period, and T
is the number of periods before the futures contract expires.
Stock Index Futures
Agreements to buy or sell a standardized value of a stock index, on a future date at a
specified price, such as trading New York Stock Exchange composite index on the New York Futures
Exchange (NYFE).
As an investment instrument it combines features of securities trading based on stock indices with
the features of commodity futures trading. It allows investors to speculate on the entire stock
market's performance, short sell (see short sale) an index with a futures contract, or to hedge a long
position against a decline in value.