Page 176 - PRIAA Glossary

VERTICAL SPREAD
An trading strategy where one option is purchased and another option is sold on the same underlying asset. The options have the same maturity but different strike prices. The strategy relies upon the difference in premium between the two options in order to make money.
VERY LARGE CRUDE CARRIER (VLCC)
Typically used on long-haul routes, an oil tanker of approximately 200,000 to 320,000 deadweight tons. Modern VLCCs can generally transport two million barrels or more of crude oil.
VESTED BENEFIT OBLIGATION (VBO)
The present value of vested pension plan benefits, i.e., funds which belong to the fund’s beneficiaries, as opposed to unvested benefits. This is therefore one measure of a pension fund’s liability.
VETTING
The practice of screening and selecting vessels for service in order to minimise risk exposure.
VISUALISATION
A design and development technique used to provide capital and commodity market participants with a holistic view
of the business through intuitive visual representations of enterprise data and information. It allows for abstraction from the oceans of fine-grained detailed data, to more coarse-grained indicative data aligned to key business knowledge, insights and activity.
VOLATILITY
A measure of price variation of a financial instrument over
a period of time. It captures risk associated with the price fluctuation of underlying assets. It is usually calculated
as the annualised standard deviation of either daily price returns, or the natural log of daily price returns, on an asset.
174