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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Tested with 60M bandwidth, the peak data rate of 5G single user reached up to 1Gbps, equaling the theoretical value. HD videos were uploaded over 5G networks in real-time by a 360-degree camera drone and downloaded by VR glasses.
The first grant of performance share units under the LTIP will have an estimated aggregate theoretical value of DKK2.9m, while each performance share unit has a value of DKK127.33.
Now this idea of words having a price made me think: doesn't everything we say already have a theoretical value? Think about it, we already subconsciously attach a price to our words.
An independent valuation said the site would be worth PS400,000, but it is understood that figures in confidential papers suggested the land's total theoretical value could be as high as PS2.5m if houses were built upon it.
The difference is observed in the range of 0.0-1.2o, and maximum difference in experimental and theoretical value is for N1-C8-C5 (1.2o).
Hence, the determination of the acceleration value due to gravity will allow the student to improve their laboratory practice and skill because, from the predicted result, they can decide whether this experiment is actually consistent with the theoretical value (Amherst College, 2010).
The gap between the actual value and the theoretical value widens as the mass percentage of Al powder increases.
These results show that, with the change of SENB specimen size, the theoretical value [G.sub.F] obtained using Equation (7) was in the range 708.18-724.15 N/m; thus, the maximum change difference was only 2.2%.
Modulus Modulus Wavelet maxima average [R.sub.m/a] haar 21.832 13.953 1.565 221.793 15.896 5.260 0.377 bior2.2 7.619 11.063 0.689 169.570 15.328 97.858 8.846 bior2.4 7.129 12.407 0.575 158.988 12.813 91.741 7.394 rbio3.1 21.141 26.362 0.802 72.736 2.759 181.937 6.902 db2 16.696 12.957 1.289 201.969 15.587 72.922 5.628 db4 6.700 11.652 0.575 77.883 6.684 90.211 7.742 Sym2 16.696 12.957 1.289 201.969 15.587 72.922 5.628 Sym4 9.616 13.351 0.720 170.803 12.793 74.579 5.586 Coif1 7.044 12.215 0.577 172.450 14.118 93.058 7.6184 Coif3 8.531 13.527 0.631 150.870 11.153 80.843 5.976 Table 4: Comparison of the theoretical value and the calculated value.
The mobility in monolayer Mo[S.sub.2] FETs in vacuum reported so far is 8 [cm.sup.2][v.sup.-1][s.sup.-1] [13-15], which is lower than the theoretical value (410 [cm.sup.2][v.sup.-1][s.sup.-1]) [15].
The theoretical value of the eigenfrequency can be obtained using an analytical model based on (8).