Valuation
Placing a value or worth on an asset. For alternative asset class investment portfolios, valuation can be determined by the last market-traded price.

VAMI
Value Added Monthly Index reflects the growth of $ 1,000 over time. The index is equal to $ 1,000 at inception. Subsequent month-end values are calculated by multiplying the previous month's VAMI index by 1 plus the current month rate of return.

Variable Limit
A price system that allows for larger than normal allowable price movements under certain conditions. In periods of extreme volatility, some exchanges permit trading at price levels that exceed regular daily price limits.

Variation Margin
During periods of great market volatility or in the case of high-risk accounts, additional margin deposited by a clearing member firm to an exchange clearinghouse.

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

Venture Capital
Venture Capital is the process by which investors fund early stage, more risk oriented business endeavors. A venture capital funding arrangement will typically entail relinquishing some level of ownership and control of the business. Offsetting the high risk the investor takes is the promise of high return on the investment.

The investment is usually in the form of stock or an instrument which can be converted into stock at some future date. As the business matures, an initial public offering may take place, or the business merged or sold, or other sources of capital found. Any of these would occur with the intention of buying out the venture capitalists. While typically expect a 20-50% annual return on their investment at the time they are brought out.

Vesting Schedule
The vesting schedule refers to the period of time from fund start-up date that partners of the general partnership are eligible to receive their share of the carried interest.

Vintage Year
The year of first drawdown of capital for investment purposes, which generally coincides with the first year of a partnership's term. Partnerships of the same vintage year are often monitored as a group, in order to assess which partnerships have been most and least effective in capitalizing on economic and market conditions over a common timeframe.

Volatility
A measure of risk for a given investment, and typically calculated as the standard deviation of returns.

Volatility Arbitrage
This strategy involves the purchase and sale of option premium in two statistically correlated securities. Profits are made by temporary market anomalies in related instruments due to 'market noise' and short-term departures from equilibrium in supply and demand in the options.