Glossary

Date on which an option contract is settled under good value.

A variable price is determined for shares admitted to continuous trading every time a trade is executed, i.e. when supply corresponds to demand. The calculation of variable prices begins after the opening price has been quoted and ceases when the closing price is determined at the end of the trading session.

VDAX ® was introduced on 5 December 1994. Since 14 July 1997, Deutsche Börse AG has calculated VDAX every minute using the Black-Scholes formula. The index is based on DAX option prices, and thus on the implicit volatility of DAX, i.e. how significant the market expects future price fluctuations to be.

The time series for daily VDAX values dates back to 2 January 1992.

The volatility index VDAX-NEW ®, which was developed by Deutsche Börse and Goldman Sachs, tracks the degree of fluctuation expected by the derivatives market – i.e. the implied volatility – for the DAX index. The index expresses in percentage terms what degree of volatility is to be expected for the following 30 days.  Since volatility is negatively correlated with the price development of a market, it is suitable for diversifying portfolios: as prices in DAX are slumping, the price of the VDAX-NEW is advancing.

The calculation of this index is based on DAX option contracts, which are quoted both “at the money“ and “out of the money“. Thus, VDAX-NEW has a broader volatility surface than VDAX®, which only takes into account options that are “at the money”. VDAX-NEW will supersede VDAX in the medium-term. Current market data

The vega factor is expressed as a negative value for short positions and as a positive value for long positions.

Venture capital companies are specialized in assessing young companies - typically innovative enterprises in growth industries where there is an element of uncertainty. Before providing capital, the venture capital firm evaluates the company's business plan, sales prospects and the market potential of its products, as well as the management skills of the prospective entrepreneurs. Venture capitalists usually cover the capital requirements of the companies they support by establishing a venture capital fund. Private investors, pension funds and other investors who wish to allocate some of their assets to high-risk investments acquire shares in the fund, leaving the selection of the portfolio companies to the venture capital firm. Venture capital firms usually participate in young companies for five to eight years, at which point they realize their profits on the investment through an exit.

Volatility provides a means of measuring a stock's potential for profit or loss independent of market development. It assumes that past values are an indication of future performance. Because the volatility ratio expresses the extent to which the value of a security can expected to change in the future, it plays a particularly important role in the calculation of options prices.

Volatility is usually calculated for periods of 30 to 250 days.