theoretical value

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 ?
The theoretical value of the share options is DKK7.
Assuming EBITDA multiples of 9-13 times for a standalone Akorn, the stock has a theoretical value of $9-$15 based on the company's Q3 EBITDA annualized and an $11-$17 share price based on estimated 2018 EBITDA, Gilbert writes.
For n"=3, traditional accepted theoretical value is equation (2): I.
The theoretical value of the delay bound at CFE for the flow f is [l.
Essays will be judged on the intellectual content, the practical and theoretical value and the presentation and style.
Identified theoretical value of movements for most sections are slightly larger than the experimental.
2] (Table I), the theoretical value of CMRR of the pseudo-differential filter is approx.
867m[OMEGA]/[degrees]C, which is very close to the theoretical value of 3.
Arup also provided a theoretical value of the airport as a public asset and said on that basis it was worth PS472m; however, the Audit Office described "the value of the public benefits as inherently uncertain".
Arup also provided a theoretical value of the airport as a public asset and said on that basis it was worth PS472m, however, the Audit Office described "the value of the public bene-fits as inherently uncertain".
Then, the compliance proportion (the ratio of total compliance) and compliance calculation errors (the relative error between the theoretical value and the FEM value) of the second and third parts are discussed.
Figure 2 shows the theoretical value of tensile strength with experimental value of tensile strength.