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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

XTB Online Trading

Fair Value or Target Price

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Glossary
Reading time: 1 minute(s)
Find out how target price, or fair value, can be used in trading.

Table of contents

  • The Target Price (Fair Value) can be defined as the estimated price level of an asset, good or service.
  • In the futures market, the Target Price can be defined as the balanced price of a contract.

How Can Target Price Be Used?

When trading the financial markets, if the futures markets are above the target price, then this is an indicator that the market sentiment is bullish, which means that there is a greater chance that the market will appreciate.

On the other hand, if the futures markets are below fair value, then this is an indicator that the sentiment in the market is bearish, which means that there is a greater probability that the market will depreciate.

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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