The market on which a futures or optionscontract is based.
A cash market is a marketplace in which the commodities or securities purchased are paid for and received at the point of sale. For example, a stock exchange is a cash market because investors receive shares immediately in exchange for cash.
Cash markets are also known as spot markets because their transactions are settled "on the spot." This can be contrasted with derivatives markets such as the futures market, where buyers pay for the right to receive a good, such as a barrel of oil, at a specified date in the future.
The cash market should not be confused with the money market, which involves trading in cash equivalents (i.e., very short-term debt instruments) such as Treasuries and commercial paper.