Cash markets are financial markets that trade assets with immediate settlement in cash, meaning that the buyer must pay and the seller must receive the cash on the same day as the transaction. Cash markets provide the quickest access to liquidity, allowing companies and investors to buy and sell bonds, stocks, commodities, futures, currencies, and other securities with minimal delay. Cash markets are used for day trading, opportunistic hedging, and a variety of other financial purposes. Investing in cash markets can provide low-cost access to liquidity, reducing risk while producing returns with greater accuracy.
Cash equivalents, such as Forex, are financial instruments, such as securities or money market instruments, that have high availability and can be converted into cash instantly. Forex, also known as foreign exchange, is a global decentralized market where various currencies are bought and sold. Because of its liquidity and because it’s one of the most actively traded markets in the world, forex is seen as a viable cash equivalent.
