I have often read that the fair value of a stock is the midpoint of the bid and the ask price. That means if bid is 100$ and ask is 101$ then the fair value of the stock is 100.5 $ and if I put in a market order, this is where I can expect the trade to settle.
Is it untrue? I always thought that the trade will take place at either 100 or 101 based on whether I want to sell or buy. So what exactly is the concept of fair value?