theoretical value

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Theoretical value

Applies to derivative products. Mathematically determined value of a derivative instrument as dictated by a pricing model such as the Black-Scholes model.

Theoretical Value

In options and futures contracts, a mathematically derived estimate of the value of the contract. The most frequently used method to calculate the theoretical value is the Black-Scholes Pricing Model. Depending upon the efficiency of the market and/or the presence of inside information, an option may trade at, above, or below its theoretical value. The concept has come under criticism for not accurately describing true market value: because theoretical value is based on past performance, it does not take into account potential future events such as changes in demand.

theoretical value

The calculated price at which a security should sell. Depending upon investor expectations and market imperfections, a security may sell at a price above or below its theoretical value.
References in periodicals archive ?
On a final note, it is important to consider that MVs are not at all theoretical values.
The traditional theoretical values for molar heat capacities [eq.
Three theoretical values of each aggregated flow under every case are obtained respectively when [delta] = [[delta].
These resistance values are used in Equation 2 to get the theoretical values in Fig.
Those industrial shells had similar measured and theoretical values of thermal conductivity at a lower temperature but were more heat conductive at a higher temperature.
The observed deviations between the experimental and theoretical values are explained by the simplifying model assumptions applied for the configuration of the SPF/SPS biocomposites.
The theoretical values are also shown for all considered modulation under the effect of considered channel model.
The new version includes limits based on theoretical values, allowing firms to control order flow based on various market scenarios.
A short version of their work may be summarized as the residuals (differences between theoretical values and found values) are plotted versus the theoretical values (in increasing value).
The key points and properties of T-[theta] curve presented in Figure 2 will be used in this study for comparative analysis between experimental and theoretical values (Section 5).
Generally, for a bandpass filter formed by cascading several parallel coupled lines, the theoretical values of the J-inverter can be easily obtained [20] as follows: