What are Tom, cash, Spot transactions?

Question

Accepted Answer

Tom, cash, and spot transactions are all types of foreign exchange transactions.

Tom transactions involve the exchange of currencies on a future date at a fixed rate.
Cash transactions involve the exchange of currencies on the spot, or immediately.
Spot transactions involve the exchange of currencies on a future date at the prevailing market rate.
Examples of spot transactions include buying euros with dollars today, but settling the transaction in two days.
Examples of Tom transactions include buying euros with dollars today, but settling the transaction in one week.
Examples of cash transactions include buying euros with dollars and settling the transaction immediately.