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Valuation
The placing of a value or worth on an asset. Real estate and bonds are given valuations by analysts who recommend whether the asset is worth buying or selling at the current price.

Valuation Account
An allowance, created by a charge to expenses, in order to provide for changes in the value of a company's assets. Also referred to as a valuation reserve. Allowance for bad debts, unamortized bond discount, and accumulated depreciation are commonly used valuation accounts.

Value Area
The price range on the CBOT Market Profile in which approximately 70% of the day's trades occur.

Value-Weighted Index
A market average such as Standard & Poor's 500 Index that takes into account the market value of each security rather than calculating a straight price average.

Variable Delta
A delta that can change due to the change of an underlying asset or a change in time expiration of an option.

Variable-Length Moving Average
A moving average where the number of periods selected for smoothing is based on a volatility measurement of price. Typically, the standard deviation of price is used to measure price volatility. The more volatile the price is, the shorter the number of periods used is for smoothing.

Vega
Greek term for the amount by which the price of an option changes when the volatility changes. Also referred to as the volatility.

Venture Capital
Unsecured term funds provided to a non-public firm by an outsider, often in start-up situations. Typically, venture capital financing entails relatively high risk. Consequently, venture capitalists look for high potential returns.

Venture Company
A company in the early stage of its development. Also referred to as a "start-up" company.

Vertical Merger
A term used to describe the combining of a company and customer, or company and supplier.

Vertical Spread
A spread in which one option is bought and one option is sold, where the options are of the same type, have the same underlying, and have the same expiration date, but have different strike prices.

Volatility
Measure of the magnitude of price or yield changes over a predefined period of time. A primary determinant in the valuation of options. There are two types of volatility: historical and implied.

Volatility (Bonds)
The measure of a bond's exposure to price fluctuations within a short-term period. In general, the longer a security's maturity, the greater its price volatility. A measure of risk based on standard deviation in fund performance over 3 years. Scale is 1-9; higher rating indicates higher risk.
Std Deviation Rating
up to 7.99 1
8.00-10.99 2
11.00-13.99 3
14.00-16.99 4
17.00-19.99 5
20.00-22.99 6
23.00-25.99 7
26.00-28.99 8
9.00 and up 9

Volatility (Options)
Measure of the amount by which an underlying is expected to fluctuate in a given period of time. Volatility is used as a primary determinant in the valuation of options premiums and time value. There are two basic kinds of volatility: implied and historical (statistical). Implied volatility is calculated by using an option-pricing model (Black-Scholes for stocks and indices and Black for futures). Historical volatility is calculated by using the standard deviation of underlying asset price changes from close to close trading going back 21 to 23 days.

Volatility Skew
The theory that options that are deeply out-of-the-money tend to have higher implied volatility levels that at-the-money options. Volatility skews measure and account for the limitations found in most options pricing models and uses it to give traders an edge in estimating an option's worth.

Volume (Vol)
The amount of shares bought and sold on a stock exchange.

Volume Price Trend (VPT)
A running sum of the day's total volume is added if the market closes positive or subtracted if the market closes lower.

Voting Right
The right of a stockholder to vote for members of the board of directors and on matters of corporate policy-particularly the issuance of senior securities, stock splits and substantial changes in the corporation's business. A variation of this right is extended to variable annuity contract holders and mutual fund shareholders, who may vote on material policy issues.