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Notional Value |
Also found in: Wikipedia | 0.29 sec. |
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Notional Value What Does Notional Value Mean? The total value of a leveraged position's assets. This term is used commonly in the options, futures, and currency markets to describe how a very small amount of invested money can control a large position (and have a large consequence for the trader). Investopedia explains Notional Value As an example, one S&P 500 Index futures contract obligates the buyer for 250 units of the S&P 500 Index. If the index is trading at $1,000, the futures contract is the equivalent to investing $250,000 (250 × $1,000). Therefore, $250,000 is the notional value underlying the futures contract. Related Terms: How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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