Spot Market is a market where the trade of an instrument corresponds with the immediate delivery. In other words, whatever financial instruments are exchanged - securities, currencies, digital assets, etc. - the trades get settled right on the spot. A spot price, therefore, is the current market price of a financial instrument.
For example, you’ve submitted Market Order for one Bitcoin on a spot cryptocurrency exchange, such as CEX.IO. Your order is executed and your Bitcoin is credited to you. You can now sell it, pay with it, hold it - you are in possession of this asset.
There are also non-spot markets, however. With futures, for example, the parties agree to transact an asset at a specified price and predetermined time in the future. Futures contracts can have either physical delivery or cash settlement.
Back to our example. With a futures contract with physical delivery, you would agree to buy Bitcoin at a specific time in the future for a price you agree with now. When the time arrives, regardless of what the price is at that moment, you buy BTC at the agreed-upon price. So, unlike in a spot market, the delivery occurs later in the future.
And, if we deal with cash-settled futures, when the contract expires, instead of buying Bitcoin, you simply get a difference between the agreed price and the price at that time. For example, you’ve entered a long cash-settled Bitcoin position at a price of $9,000 per Bitcoin. When the contract expires, the price of Bitcoin is $9,200. In cash settlement, you get $200 credited to your account. So, unlike in the spot market, there is no delivery at all!