zpostcode
notional value
Apr 2, 2025 8:24 PM

  In financial instruments, the notional value (also called the notional amount and the principal amount) is the total value—in dollars or another unit of currency—controlled by an instrument. Depending on the underlying asset or financial instrument, notional value may be used to assess its cost to acquire, calculate payments on the asset or instrument, and, if purchased and/or held in a margin account, notional value may be used to determine the instrument’s buying power.

  The bond market. In corporate bonds, Treasury bonds, notes, and bills, and other fixed-income securities, the notional value is the face value, typically $100 or $1,000. Futures contract. In futures markets, notional value is based on the prevailing price and the contract size of the underlying commodity, stock index, or other financial instrument. For example, if corn is trading at $4.50 per bushel, a standard contract (5,000 bushels) would have a notional value of ($4.50 x 5,000) = $22,500. Futures contracts don’t require a deposit of the full notional value, but rather a “good faith” margin deposit based on notional value. Option contract. Standard U.S. equity option contracts are deliverable into 100 shares of the underlying stock or exchange-traded fund (ETF). For example, if shares of Walt Disney Co. (DIS) are trading for $105 per share, the notional value of a call option would be ($105 x 100) = $10,500. If you purchase shares in a cash account, you would be required to pay the full notional value in order to acquire the shares. If it’s a margin account, you may be allowed to borrow up to 50% of the notional value. Doug Ashburn

Comments
Welcome to zpostcode comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Recommend >
5 Buildings You Have to See in Chile
      Have you heard of a half house? Been poked by a church made of cacti? Taken a stroll through a university with a wide-open addition? If any of these architectural features surprise you, you need to take a closer look at this list of the five buildings you need to see in Chile.   Earlier versions of the...
20 Must
     Walter Hochauer In the early 1990s, an intact mummy was discovered in the Ötztal Alps, on the Italian-Austrian border, that proved to be more than 5,000 years old. What is known today as Austria has been populated for a very long time; the buildings here are just a blip on the region’s history, but they’re all worth seeing when...
5 Historically Significant Houses in Germany
     Library of Congress, Washington, D.C. (neg. no. LC-DIG-ppmsca-01163)Germany’s cultural heritage is expressed through the homes of some of its most recognizable writers, composers, artists, and thinkers. Here are five of the most notable.   Earlier versions of the descriptions of these houses first appeared in 1001 Amazing Places You Must See Before You Die, edited by Richard Cavendish (2016). Writers’...
5 Must
      What is today the area occupied by Dublin was first noted in writings by Ptolemy that date to about 140 CE. The earliest proven settlement there was a Norse one in the 9th century. This list provides a snapshot of Ireland’s capital city in more recent years.   Earlier versions of the descriptions of these buildings first appeared...
Information Recommendation
5 Significant Buildings in Delhi
      These five places are all historically and architecturally significant buildings unique to Delhi. They offer a physical manifestation of the city’s cultural development through time.   Earlier versions of the descriptions of some of these buildings first appeared in 1001 Buildings You Must See Before You Die, edited by Mark Irving (2016). Writers’ names appear in parentheses....
4 Fountains in Italy (and 1 in England)
     Fountains are a common feature of many cities, but Italy has a handful of unusually notable ones. There’s also one in England that, arguably, reflects the cultural differences between the two countries.   Earlier versions of the descriptions of these fountains first appeared in 1001 Amazing Places You Must See Before You Die, edited by Richard Cavendish (2016)....
5 Landmark Buildings in Copenhagen
      Copenhagen’s history reaches back to at least the 10th century, when a village is known to have existed where Denmark’s capital does today. Copenhagen’s architectural heritage is extensive and spans centuries; these five buildings are, relatively speaking, more recent and not always at the top of the typical traveler’s itinerary.   Earlier versions of the descriptions of these...
5 Buildings to See in Istanbul
      From an ancient mosque to a brand-new entertainment center, these are the buildings you have to see in Turkey’s largest city, Istanbul. Plus, learn the awe-inspiring history behind these buildings and their architects.   Earlier versions of the descriptions of these buildings first appeared in 1001 Buildings You Must See Before You Die, edited by Mark Irving (2016)....
25 Must
      China’s recorded history stretches back more than 4,000 years. These 25 buildings merely scratch the surface of the country’s rich architectural heritage.   Earlier versions of the descriptions of these buildings first appeared in 1001 Buildings You Must See Before You Die, edited by Mark Irving (2016). Writers’ names appear in parentheses.   Labrang Tashi Kyil MonasteryLocated on...
21 Tombs Around the World
     A tomb, according to Britannica’s entry, is “a home or house for the dead.” Here are 21 tombs (or sites of many individual tombs) from around the world that show the varied ways that different cultures at different times have housed and honored their dead.   Earlier versions of the descriptions of these tombs first appeared in 1001 Amazing...
5 Historic Buildings in Liverpool
      Liverpool’s history began in 1207, when England’s king chartered a town there. None of these five structures are quite that historic, but all of them capture a vivid sense of the times in which they were built.   Earlier versions of the descriptions of these buildings first appeared in 1001 Buildings You Must See Before You...
5 Architectural Must
     Mikael Damkier/Shutterstock Before you walk over Stockholm’s 50-plus bridges or visit their ABBA museum, you need to put these architectural marvels on your must-see list. From a Neoclassical theater to a Modernist collective housing project to—if you dare—a crematorium that is a mix of both styles, these are the buildings you need to visit on your next trip to...