Vega
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 the implied volatility of the underlying asset. Volatility measures the amount and speed at which price moves up and down,...
Valuation Period
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 either daily, monthly, or yearly. The valuation period is used to determine the worth of an investment at a given...
Value Added
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 product, with few differences (if any) from that of a competitor, and provides potential customers with a feature or add-on...
Valuation Reserve
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 are required because life insurance contracts can be in effect for long periods of time, and the securities valuation reserve...
Value Added Monthly Index (VAMI)
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 Rate of Return) Explaining 'Value Added Monthly Index - VAMI' The value-added monthly index charts the total...
Variable Prepaid Forward Contracts
What is 'Variable Prepaid Forward Contracts' An agreement to give a predetermined number of shares to a brokerage firm, with the stipulation of officially transferring title at some future date. The original owner receives a high percentage of the value of the shares at the time of transfer and receives a portion of the gains at the...
Variable Overhead
What is a 'Variable Overhead' Variable overhead is the indirect cost of operating a business, which fluctuates with manufacturing activity. For example, while most overhead costs, such as rent, salaries and insurance, are typically fixed, expenses paid to utilities for electric power, gas and water tend to vary depending on the rollout of new products, manufacturing cycles...
Variable Benefit Plan
What is 'Variable Benefit Plan' A type of retirement plan in which the payout changes depending on how well the plan's investments perform. Variable benefit plans, also called defined contribution plans, allow the plan holder to manage his or her own account. By contrast, a defined benefit plan provides the plan holder with predetermined payments upon retirement...
Valued Marine Policy
What is 'Valued Marine Policy' A type of insurance coverage that places a specific value on the insured property, such as the hull or cargo of a shipping vessel. A valued marine policy pays up to, or in its entirety, the specified value in the event of a total loss. It differs from an unvalued marine policy...
Velocity Of Money
DefinitionThe term "velocity of money" refers to how fast money passes from one holder to the next. It can refer to the income velocity of money, which is the frequency at which the average same unit of currency is used to purchase newly domestically-produced goods and services within a given time period. In other words, it is the number...