Market value, also known as open market valuation (OMV), is the price at which an asset would trade in a competitive auction setting. It is the value that the investment community gives to a particular equity or business. Market value is often used interchangeably with fair value, fair market value, or OMV, although these terms have distinct definitions in different standards and differ in some circumstances.

Market value is a concept distinct from market price, which is the price at which one can transact, while market value is the true underlying value according to theoretical standards. The concept is most commonly invoked in inefficient markets or disequilibrium situations where prevailing market prices are not reflective of true underlying market value.

Market value is the most commonly used type of value in real estate appraisal in the United States because it is required for all federally regulated mortgage transactions and has been accepted by US courts as valid. However, real estate appraisers use many other definitions of value in other situations.

Market value is easiest to determine for exchange-traded instruments such as stocks and futures, since their market prices are widely disseminated and easily available, but is a little more challenging to ascertain for over-the-counter instruments like fixed income securities.

A companys market value is a good indication of investors perceptions about its business prospects. The range of market values in the marketplace is enormous, ranging from less than $1 million for the smallest companies to hundreds of billions for the worlds biggest and most successful companies. Market value is determined by the valuations or multiples accorded by investors to companies, such as price-to-sales, price-to-earnings, enterprise value-to-EBITDA, and so on. The higher the valuations, the greater the market value.

In summary, market value is the price an asset would fetch in the marketplace, or the value that the investment community gives to a particular equity or business. It is a dynamic measurement that fluctuates considerably with time and takes numerous factors into account, such as long-term growth potential, supply and demand of a businesss shares, and valuation ratios used to evaluate whether a stock is overpriced, underpriced, or priced fairly.