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 ?
This is when a theoretical value is determined for your company by looking at comparable companies in the market.
Following injections of jet grouting of the bench and the land on which the spring is anchored be executed, so that once the work is completed, proceed to regrow the edge of the dock to let crowned the theoretical value of the same .
The strongest essays in the collection are testaments to the ethical, political, and theoretical value of close engagement with cultural objects.
Expressed another way: as the sample size increases, one expects the variation to decrease between the relative frequency of the outcomes and the theoretical value.
3) Ten percent reduction: Theoretical value calculated based on results of this study, from reducing standby power on certain appliances over a fixed period of time.
Ferrarese applies an historical-political reading to Balestrini's 'pensiero operaista' as presented in Vogliamo tutto (1971) and Gli invisibili (1987), and explains the theoretical value of Balestrini's ideas in the present age of globalization.
The recommended CODATA 20 2 value of the inverse fine structure constant is smaller than the theoretical value in the Euclidean plane:
The implied volatility figure, which is used as a pricing model, and looks at the theoretical value for the option equal to the current market price of that option, also rose 32.
The results obtained by the monodisperse tests are very close to the theoretical value for the 1.
These conditions from the results shows that the theoretical value compared faviourable well with the measured values, showing the rate of reality of the model to predict the transport of microbe influence by porosity at Okwuezi Rivers State of Nigeria.
The calculation is based on the individual fuels' experimental values using an arithmetic average method to determine the blends' theoretical value for ash content.
The problem is that valuation specialists are now having to determine the theoretical value of what an asset would be sold for when there is absolutely no chance it will ever be sold.