The difference between Price and Value

Many frequently use price and value to mean the same thing. As wealth builders, let’s start with a definition.

Value = the importance, worth or usefulness of something.

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When the bid x ask spread in futures has increased so that you know when to wait for a better entry, learn how to recognize. That is the sign of a trader who knows the difference between price and value.

We see the price on the chart or quote board when we trade in the various financial markets. The price is what the market maker is selling or buying the specific financial product you are researching.

Is it price or value that causes you to hesitate to take advantage of excellent trading information when it is free? Look at the price versus the value when you find yourself hesitating.

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The value of that instrument can be something different if you know where to look. Do you know what theoretic value is for an option?

Is it price or value that causes you to hesitate to take advantage of excellent trading information when it is free? Look at the price versus the value when you find yourself hesitating.

The value of that instrument can be something different if you know where to look. Do you know what theoretic value is for an option?

Become a knowledgeable wealth builder at WealthBuildersHQ.

Price = the amount of money required in payment for something.

These are abbreviated definitions, but they start to show us something potentially useful in our trading.