| In general, a valuation that is in accordance with standard methodology and is deemed reasonable to all parties involved in a transaction in light of the pre-existing conditions and circumstances. In the case of futures, it is the theoretical price at which a futures contract should trade to be equivalent to the value of the underlying instrument and the cost of carry (allowing for the net effect of interest and dividends). In options trading the term is also used when referring to intrinsic value. In accounting terms, it refers to a current valuation (as opposed to the historic cost), derived either from a market value or by a calculation of present value, for instance, by using a discounted cash flow model.
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