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.
Theta ...
Theoretical Value (Fair value) - The price an option is "worth," based on a mathematical calculation and some assumptions. In the real world, the actual price usually differs from the 'fair' price.
THEORETICAL VALUE
An option's value generated by a mathematical model given
certain prior assumptions about the term of the option, the
characteristics of the underlying futures contract, and prevailing
interest rates.
>> Theoretical Value
The estimated value of an option derived from a mathematical model.
>> Tick ...
where C is the theoretical value of an option, and f is a pricing model that depends on σ, along with other inputs.
Fair Value or Theoretical Value
An estimate of an options worth produced by a mathematical pricing model, ...
A measure of the theoretical value of a zero-coupon bond at any given point in time. Because there are no interest payments like there are with traditional bonds, the interest of a zero-coupon bond accrues until maturity.
implied volatility A theoretical value designed to represent the volatility of the security underlying... implied warranty An unwritten warranty that results automatically from Federal or state laws.
Hedge ratio (delta) For options, ratio between the change in an option's theoretical value and the change in price of the underlying stock at a given point in time.
A measure of the rate of change in an options theoretical value for a one-unit change in the volatility assumption....(Read more)
Keogh Pension Plan
In the US, a tax deferred retirement savings plan for the self employed.
Theoretical value of an ETF, disseminated by Euronext throughout the trading session. The indicative net asset value (NAV) is used as the reference price:
- by liquidity providers and intraday investors,
- to calculate price ranges (+/-1.
bond's value at present interest rate the theoretical value of a bond if interest rates remained at the current level
accreted value - Related Articles
Mergers and Acquisitions: Patterns, Motives, and Strategic Fit
Best Practice ...
A mathematical formula that determines a theoretical value for an option on stock subject to trade on an option exchange. May be used by a company that chooses to apply the FAS123 rule to stock granted to employees.
the yield spread that can be used to convert dollar differences between theoretical value and market price.
2) The cost of the implied call embedded in a MBS, defined as additional basis-yield spread. When added to the ...
(a) The spread over an issuer's spot rate curve, developed as a measure of the yield spread that can be used to convert dollar differences between theoretical value and market price.
Option-Adjusted Spread (OAS) The over an issuer's curve, developed as a measure of the spread that can be used to convert dollar differences between theoretical value and market price.
That portion of a warrant or call option's price that represents the amount by which the market price of a security exceeds the price at which the warrant or call option may be exercised (exercise price). Considered the theoretical value of a ...
0 common shares, a 75% hedge ratio would be short (long) 1500 common for every 1000 preferred long (short). For options, ratio between the change in an options theoretical value and the change in price of the underlying stock at a given point in time.
This works because the model assumes that all investors agree on the beta and expected return of any asset. In practice, this assumption is unreasonable, so the CAPM is largely of theoretical value.
of actually traded Treasury debt securities, because there are no zero-coupon Treasury debt issues with a maturity greater than one year. Like the yield curve, this is a graphic depiction of the term structure of interest rates.
Theoretical ...
In these strategies, the fund manager attempts to make a gain from the temporary and abnormal movement of the share price of a stock away from its theoretical value before the share prices are again realigned.
Option-adjusted spread (OAS) (1) The spread over an issuer's spot rate curve, developed as a measure of the yield spread that can be used to convert dollar differences between theoretical value and market prices.
 See also: Spot rate, Ted spread, Spot rate curve, Exercise price, Option price
  
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