Shrikant
(Associate)
(350 Points)
Replied 03 December 2018
To add with Mr. Surana's comments,
Notional value is the dollar amount an investor controls of a particular asset or position. It may be based on a market value, but there is a clear distinction: the notional value accounts for the total value of the position, while the market value is the price at which that position can be bought or sold in the market place.
While notional value can be used in futures and stocks (total value of the stock position), in the ways discussed above, notional value also applies to interest rate swaps, total return swaps, equity options, and foreign currency derivatives.