The first step of the forehand volley is the pivot and shoulder turn. Coming out of your split step, pivot with your outside foot and transfer your weight to that foot, get the heel of your inside foot up, and turn your shoulder sideways. Just like for a forehand groundstroke, the pivot and shoulder turn is how you start to take your tennis racket back on your forehand volley, but there are a few differences.
First, when you pivot and turn you should lay the tennis racket back with your wrist. You want your hitting hand to be somewhere in between your shoulders (as seen from the side) and the racket should be laid back so that the head of the racket is behind your hand.
If we look at this position from the front now at about 0:55 in the video above, you can see that the tennis racket head is still pointed up at the sky even though I have laid my wrist back. The racket and my arm (up to the shoulder) create what some coaches have called a U-shape. Other coaches compare the relationship between the forearm and racket to a V or L-shape. This is the arm and racket position you want to be in when you complete the pivot and shoulder turn. From this spot your preparation is done and you are ready to swing foward and make contact with the tennis ball on your volley.
At 1:30 in the video, Frank is beginning his forehand volley motion. He pivots his outside foot and transfers his weight to that foot, and gets the heel of his inside foot up. At the same time, he turns his shoulders sideways, and lays his wrist back so that the tennis racket is angled back slightly. His hitting hand stays between his front and back shoulders, but the head of the racket is further back. Looking at this from the front at 2:00, when he performs this step, the racket and his arm form that U or V-shape that we talked about. That arm position completes his preparation, and he is now ready to swing forward to the tennis ball.