Fair value definition

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Fair value has two meanings to investors.

  1. Generally, it is used to mean the value attributed to a stock by an individual investor or broker.
  2. In futures trading, it can refer to the predicted price of a market which is reflected in the cost to open a position.

In many companies, the fair value of stock can be subject to much debate among investors. Technology companies that show promise but not profit can have fluctuating fair values from different brokers and investors, for example.

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