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V-Rating - A rating of collateralized mortgage obligation
tranches based on their expected volatility.
Value Added Tax - A tax levied on the value added at each stage of
production in contrast to a sales tax or consumption tax levied only on
the final selling price.
Value Date - Value date is a reference to the delivery date for funds
traded in regards to Eurodollar deposits and foreign exchange.
Value Dating - Refers to the date when credit is given for funds that
have been transferred between banks.
Value Lock Level - The lowest payout rank on a ladder option or note.
Value Management - Technique that focuses on the fundamental value of a
company as a function of the value of its equity securities. Ex. book
value to market value, price earnings ratios, etc.
Value Manager - A manager seeking to buy stocks at a discount to their
value and sell them at or above that value. Generally a stock with low
price to book value.
Value-added tax - A method of taxation whereby an indirect tax is levied
at every stage of production on the added value at each specific stage.
Value-at-Risk Model - A model used for the estimation of the probability
of portfolio losses exceeding some named proportion. This model is based
on a statistical analysis of historical market price trends,
volatilities, and correlations.
Vanilla Issue - A security with no irregular features.
Vanishing Option - Any option with an outstrike price that terminates
the contract.
Variable Annuities - An annuity contract whereby the issue will pay a
periodic amount related to the performance of an underlying portfolio.
Variable Common Rights - A call option issued to shareholders of an
acquired company that pays the selling shareholders additional common
shares if the purchasing company's stock sells over a predetermined
average price and time period.
Variable Cost - Cost which is proportional to the volume of production.
If production is equal to one, the variable cost is equal to one.
Variable Coupon Renewable Notes - Notes with a coupon set weekly at a
fixed spread over the 91-day T-bill rate.
Variable Cumulative Preferred Stock - A preferred stock in which the
issuer has the option to select between a Dutch auction reset rate and a
remarketing reset rate arrangement at the end of each dividend period.
Variable Life Insurance Policy - Related to whole life insurance
policies. A policy that provides a death benefit related to the insured
individual’s portfolio market value at the time of death.
Variable Maturity Option - A put or call which matures substantially
sooner than its expiration date if the underlying has moved
significantly in a favorable direction prior to an early maturity date.
Variable Price Security - A security that sells at a market- determined
price.
Variable Rate CD - Certificates of Deposits (short-term) that pay
interest on a roll date with the coupon being adjusted to reflect the
current market rates.
Variable Rate Loan - Loan with an interest rate that will fluctuate
based on an interest rate such as the Prime Rate.
Variable Rate Renewable Notes - Notes with a coupon rate set monthly at
a fixed spread over the monthly commercial paper rate.
Variable Rated Demand Bond - A floating rate bond issued with the
stipulation that it can be sold back periodically to the issuer.
Variable Redemption Bonds - Bonds with a fixed redemption of principal
and a variable components of principal redemption based on an index
rate.
Variable Spread - Imbalanced holding of long and short positions are in
two options of the same type and class but different strike prices or
expiration dates.
Variance - A measure of dispersion based on a set of data points in
relation to their mean value. Used as a method of bond indexing, using
historical data.
Variance Drain - The difference between the average return and compound
return over an extended period of time due to the variance of periodic
returns.
Variance Rule - Specifies the permitted minimum or maximum quantity of
securities that can be delivered to satisfy a T.B.A. trade.
Variation Margin - An additional deposit that is required to bring an
investor's equity account up to the initial margin level. This is used
when the balance falls below the margin requirement maintenance level.
Vega - Term for a dollar change in option price as a result of a
percentage point change in volatility.
Velocity - The circulation rate of money in the economy.
Venture Capital - A form of capital that is sought by early-stage and
start-up companies that are seeking rapid growth.
Vertical Acquisition - Acquisition in which the acquired firm and the
acquiring firm are at different steps in the production process.
Vertical Analysis - An analysis used to identify expense items that are
rising faster or slower than a change of sales. It is reached by
dividing the expense item by the net sales.
Vertical Bear Spread - Option spread with the same expiration and the
same number of contracts on the purchase and the sell, but the option
purchased has a higher strike than the option sold.
Vertical Bull Spread - Option spread with the same expiration and the
same number of contracts on the purchase and the sell, but the options
sold has a higher strike than the option purchased.
Vertical Merger - A vertical merger occurs in the same industry between
two firms that are in different stages of the production cycle.
Vertical Spread - The purchase and sale of two options contracts where
the only difference is in the exercise price.
Very Accurately Defined Maturity Bond - A class of collateralized
mortgage obligations with low prepayment risk.
Virtual Currency Option (3-D’s) - A an options contract that is settled
in US currency rather as opposed to the underlying currency.
Visible Supply - A municipal bond issue that is scheduled to come to
market within 30 days.
Volatility - A measurement of risk based on the standard deviation of
the asset return. Volatility is also a variable in an options pricing
formula.
Volatility Cone - A method of measuring current option implied
volatility as a function of historic volatilities at different maturity
ranges.
Volatility Option - An option contract with a payoff based on the level
of volatility in a market.
Volatility Risk - The risk in the value of options portfolios due to the
unpredictable changes in the volatility of the underlying asset.
Volatility Skewness - The trend of the volatility of an underlying to be
inversely related to stock price.
Volatility Value - The full value of an out-of-the-money option. With
basis value added, the sum is the premium over intrinsic value for an
in-the-money option.
Volume - The number of shares of a security that change hands between a
buyer and a seller in a given day.
Voting Rights - The right to vote for security holders as in voting for
a board of directors.
Vulture Fund - A pooled account that specializes in high risk
investments such as high-yield bonds in or bonds near default. |
