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Fair Value

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Description

Fair value typically refers to the value that an individual investor or broker assigns to a particular stock. However, in the context of futures trading, it can refer to the market’s expected price, which is reflected in the cost of opening a position. Fair value is determined by the market and agreed upon by both buyers and sellers in a transaction.

Fair value is the price an individual investor or broker might assign to a stock, but in futures trading, it represents the market’s expected price, influencing the cost of initiating a position. This value is a consensus between buyers and sellers, reflecting what the market deems as a reasonable price. Understanding fair value is essential for assessing whether an asset is overpriced or undervalued in the market.

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