What is Notional Value?
Notional value is the full market value a derivative position controls: for an index future, the index level times the contract multiplier. One Micro E-mini S&P 500 with the index at 5,000 has a notional value of 5,000 x $5, or $25,000.
Why Notional Value matters
Comparing notional value with the margin posted shows how much leverage the position really carries.
Related terms
Lessons that use this term
- What are futures? Contracts, margin and tick value
- Position sizing: how many shares or contracts to trade