A flat price represents the absolute price of a commodity or financial instrument without adjustments for differentials, premiums, discounts, or other pricing modifications. Flat pricing provides a baseline reference point before applying location, quality, or timing adjustments. This concept is particularly important in commodity markets where final transaction prices often differ from benchmark flat prices.

Flat prices serve as starting points for negotiations and contract pricing, with final prices determined by adding or subtracting various differentials based on specific transaction characteristics. Understanding the relationship between flat prices and final transaction prices is crucial for accurate market analysis and profitable trading decisions.

Real-world example: Brent crude oil quotes a flat price of $80 per barrel, but Nigerian crude might trade at the flat price minus $2 per barrel due to quality differentials, while North Sea crude trades at flat price plus $1 for location advantages.