Glossary of Financial Terms starting with Alphabet ‘V’

Glossary of ‘Financial Terms’ starting with Alphabet ‘V’, i.e. ‘Meaning’ or ‘Definition’ of Common and Unusual terms relating to Accounting, Auditing, Company Law, GST, Income Tax, Investments, etc., along with the ‘Context’ in which they are used.

Value investing

The investment style of attempting to buy underpriced stocks that have the potential to perform well and appreciate in terms of price.

Value at Risk (VAR)

VAR is the maximum loss over a target horizon such that there is a low, prespecified probability that the actual loss will be larger.

Vanilla Issue

A straight fixed rate issue which has terms and conditions usually accepted as being conventional to a particular securities market.

Vanishing companies

Companies which have not complied with specific provisions of the listing agreement and regulations of the stock exchanges, and are not physically traceable at the registered address mentioned in the offer document.

Venture Capital

Professional moneys co-invested with the entrepreneur usually to fund an early stage, more risky venture. Offsetting the high risk is the promise of higher return that the investor takes. A venture capitalist not only brings in moneys as “equity capital” (i.e. without security/charge on assets) but also brings on to the table extremely valuable domain knowledge ,business contacts, brand equity, strategic advice, etc. He is a fixed interval investor, whom the entrepreneurs approach without the risk of “takeover”.

Venture Capital Fund

A fund established in the form of a trust or a company including a body corporate and registered under the SEBI venture capital fund regulations which – has a dedicated pool of capital, raised in a manner specified in the regulations and invests in venture capital undertaking in accordance with the regulations.

Venture Capital Undertaking

A domestic company whose shares are not listed an a recognised stock exchange in India and which is engaged in the business for providing services, production or manufacture of article or things or does not include such activities or sectors which are specified in the negative list by the Board with the approval of the Central Government.

Vertical spread

Buying and selling puts or calls of the same expiration month but with different strike prices.

Vesting

The process by which the employee is given the right to apply for shares of the company against the option granted to him in pursuance of Employee Stock Option Scheme.

Volatility

Volatility equates to the variability of returns from an investment. It is an acceptable substitute for risk; the greater the volatility, the greater is the risk that an investment will not turn out as hoped because its market price happens to be on the downswing of a bounce at the time that it needs to be cashed in. The problem is that future volatility is hard to predict and measures of past volatility can, themselves, be variable, depending on how frequently returns are measured (weekly or monthly, for example) and for how long. Therefore, putting expectations of future volatility into predictive models is of limited use, but resorting to using past levels of volatility is equally limited.

Volume of Trading

The total number of shares which changes hands in a particular company’s securities. This information is useful in explaining and interpreting fluctuation in share prices.

Voluntary delisting

Delisting of securities of a body corporate voluntarily by a promoter or an acquirer or any other person other than the stock exchange.

Voting Rights

The entitlement of a shareholder to exercise vote in the general meeting of a company.

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