The spot market is a real-time commodity market for instant sale and delivery of energy. Spot markets exist for natural gas, where they're operated on a time scale of days to weeks, and for electricity, where the time scale can be as small as a few minutes. There is no single spot marketplace for energy. Spot markets can operate wherever the infrastructure exists to conduct the transactions. Most spot markets that used to be conducted on trading floors are now operated over the Internet.

The spot market allows producers of surplus energy to instantly locate available buyers for this energy, negotiate prices within milliseconds and deliver actual energy to the customer just a few minutes later. Unlike computer brokerage systems, which may automatically provide best-match pricing for both buyers and sellers, the spot market allows for negotiation by both parties prior to the sale using the same auction-style bidding systems used by stock and commodities markets.

Spot markets can be either privately operated or controlled by industry organizations or government agencies. They frequently attract speculators, since spot market prices are known to the public almost as soon as deals are transacted.

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