What is a 'Variable Interest Rate' A variable interest rate is an interest rate on a loan or security that fluctuates over time, because it is based on an underlying benchmark interest rate or index that changes...
What is 'Vega Neutral' A method of managing risk in options trading by establishing a hedge against the implied volatility of the underlying asset. A vega neutral option position will be not be sensitive to volatility fluctuations....
What is value deflation and how does it work
Value deflation occurs when the prices of goods and services decrease. This can happen when there is an increase in the supply of a good or service, or when there is...
Definition
A variance swap is an over-the-counter financial derivative that allows one to speculate on or hedge risks associated with the magnitude of movement, i.e. volatility, of some underlying product, like an exchange rate, interest rate, or stock index.
Benefits and...
What is 'Variable Price Limit' A schedule of price variations above or below the accepted limits determined by the commodities exchanges for any one trading day. Explaining 'Variable Price Limit' Variable price limits allow...
What is 'Vega' Vega is the measurement of an option's sensitivity to changes in the volatility of the underlying asset. Vega represents the amount that an option contract's price changes in reaction to a 1% change in...
What is a valuation period
A valuation period is a set period of time during which the value of an asset or security is calculated. This period can vary depending on the asset or security being valued, but is typically...
What is 'Value Added' Value-added describes the enhancement a company gives its product or service before offering the product to customers. Value-added applies to instances where a firm takes a product that may be considered a homogeneous...
What is 'Valuation Reserve' The funds set aside by life insurers as required by state law to compensate for declines in the value of investment instruments that are held by the insurance company as assets. Valuation reserves...
What is 'Value Added Monthly Index - VAMI' An index that tracks the monthly performance of a hypothetical $1000 investment. The calculation for the current month's VAMI is: = Previous VAMI x (1 + Current...