Chartered Market Technician (CMT) Practice Exam

In spot markets, commodities like gold are characterized by being sold for immediate delivery. This means that the transactions involve the immediate exchange of commodities for cash, with the expectation that delivery will happen right away or very shortly after the transaction is completed. This immediacy distinguishes spot markets from futures markets, where contracts are created for the purchase or sale of assets at a future date.

The nature of spot transactions reflects the urgent demand for and supply of the commodity, allowing immediate settlement. Investors or purchasers in a spot market expect to receive the physical commodity and take ownership promptly after the transaction.

The other options pertain to different aspects of trading and market dynamics. Selling for future delivery specifically relates to futures contracts and involves commitments to exchange commodities at a defined future date. Trading on margin applies to leveraged trading practices, where a trader borrows funds to increase their buying power; this is more typical in derivatives markets rather than spot markets. Pricing only in local currency suggests limitations on currency options in financial transactions, but spot markets often facilitate transactions in multiple currencies depending on the market participants involved.