Fair Value or Target Price

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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.

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