A market in which cash-like securities and other similar instruments/ products are traded and exchanged. A cash market is also defined as a marketplace where prices for commodities or securities are paid for and received at the time of the transaction (i.e., immediately settled)- immediate delivery and payment.
In yet another context, a cash market is where actual assets (e.g., commodities) are traded, rather than through other instruments (such as derivatives).
In the context of banking, a cash market refers to a market place for unsecured, overnight loans between banks (interbank overnight loans). By averaging interest rates on such loans, a cash rate can be determined.
It is also known as a spot market.
