Fair value is a tool used by investors to understand the relationship between the value of futures contracts and the current price of a stock. The term is used in pre-market hours to help forecast the direction of the market.

An Elementary Understanding of Fair Value vs. Futures Price - TheStreet

Any differences are used by sophisticated investors to create arbitrage opportunities. What is fair value and how is it interpreted by investors? Salman Khan of the Khan Academy gives a detailed explanation in the videos below.

What's Fair Value? -- The Motley Fool

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An Elementary Understanding of Fair Value vs. Futures Price - TheStreet

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