Nominal value is a term used to describe the total value or amount related to futures contracts or other types of leveraged investment opportunities. This value usually involves assets sold in the money market, commodities sold as part of a futures agreement, and options for odd or even stocks. The key to determine the nominal value is to determine the number of units involved in the transaction, and then multiply this number by the price related to these units.
The key to determine the nominal value is to determine the number of units related to the transaction and multiply this number by the price related to these units. The simplest way to understand the nominal value is to consider that the structure of the commodity contract as the basis of the futures contract requires the buyer to buy 65,438+0,000 units, and the spot price of these units is currently 500 US dollars, which means that the nominal value of the investment is currently set at 500,000 US dollars.
Because the spot price represents the amount that the commodity will bring if it is sold immediately, knowing the nominal amount makes it easier for investors to predict what will happen to the investment value on the expiration date of the contract, which is also a necessary condition for completing the transaction.
This means that if the relevant units may appreciate in the medium term, as part of the contract, investors hope to lock in the current spot price and then sell these stocks in a profitable way in the future.