Notional Value
Total underlying value controlled by a position
What is Notional Value?
Notional Value The total underlying value controlled by an options position. For one equity option contract, notional value equals the stock price times 100 shares. A single AAPL option at $150 controls $15,000 of notional value. Understanding notional exposure helps assess the true scale of risk, especially for leveraged positions.
Complete Definition
The total underlying value controlled by an options position. For one equity option contract, notional value equals the stock price times 100 shares. A single AAPL option at $150 controls $15,000 of notional value. Understanding notional exposure helps assess the true scale of risk, especially for leveraged positions.
Example
10 SPY call contracts at $500 have notional value of $500,000 (10 contracts * 100 shares * $500). Your premium might be only $20,000.
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