Fair value: how it is computed and why

The fair-price model and deviation from it. When “cheap” is a signal and when it is a trap, and how to read it on the item card.

What is fair value and how is it computed?

Fair value is the VWAP over history: the volume-weighted average price across the period. High-volume days weigh more than random spikes, so it’s a stable anchor for the “normal” price rather than a snapshot of the order book that twitches every minute.

What does the “vs fair” column show?

“vs fair” shows how far the current price has deviated from the model. A value ≤ 0 means the price is below fair (potentially cheap), > 0 means above. It’s a handy filter: sorting by it quickly surfaces items trading below their usual level.

But “cheap” is only a signal in context. Sometimes the price dropped for a reason: oversupply after mass production, an item nerf in a patch, a structural shift in demand. Then it’ll stay there, and fair value itself will drift down to follow the market over time.

When is “cheap” a trap?

Three classic false-cheap cases: a one-off print on a single trade (especially in illiquid items), a slow settle after a patch (the item is no longer needed in the old volume) and a seasonal demand dip. In all three the downward deviation won’t snap back to the old norm — you buy “cheap” and get stuck.

How do you use “vs fair” properly?

Never on its own. Combine “vs fair” with liquidity (turnover, volume) and risk (volatility, spread persistence). Cheap + liquid + calm is a good mean-reversion candidate; cheap + illiquid + jumpy is usually a trap.

The item card makes this visual: the price chart with its history shows whether the price has been here before and how fast it bounced, and the “Signals” panel next to it gives turnover, volatility and persistence at a glance. Decide on the whole picture, not one green number.