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UNDERLYING: The security upon which the value of an option depends. Underlying securities can include stock, futures and indexes.

UNDERVALUED OPTION: An option trading at less than its theoretical value, as estim using an option valuation model.

UNSYSTEMATIC RISK: The risk of an individual stock that is a function of that comp outlook for earnings, new products or other company-specific news. Unsystematic risk has relationship to the systematic risk, or risk inherent in the broader market. Also known as company-specific risk.

VIX: The Volatility Index (VIX) is a widely-viewed measurement of volatility expectations.

VOLATILITY: A measure of actual or expected price movement in an underlying, expre as a standard deviation in percentage terms over a specific time period.

VOLATILITY TEST: A risk management tool in which a trader calculates several theor values for a position using different volatility assumptions. Usually, a position is considered undesirable unless it is acceptable under a broad range of volatility assumptions.

VOLUME: For options, the number of contracts that have been traded within a specific time period, usually a day or a week.

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