Volume Weighted Average Price - VWAP

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What is the 'Volume Weighted Average Price - VWAP'

The volume weighted average price (VWAP) is a trading benchmark used especially in pension plans. VWAP is calculated by adding up the dollars traded for every transaction (price multiplied by number of shares traded) and then dividing by the total shares traded for the day.

Volume Weighted Average Price (VWAP)

BREAKING DOWN 'Volume Weighted Average Price - VWAP'

The theory is that if the price of a buy trade is lower than the VWAP, it is a good trade. The opposite is true if the price is higher than the VWAP.

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RELATED FAQS
  1. Why is the Volume Weighted Average Price (VWAP) important for traders and analysts?

    Learn how traders use the VWAP to calculate the average price weighted by volume and to analyze the momentum of trading on ... Read Answer >>
  2. What is a common strategy traders implement when using the Volume Weighted Average ...

    Find out about a common strategy that traders use with the volume-weighted average price, including the use of VWAP with ... Read Answer >>
  3. What are the best technical indicators tocomplement the Volume Weighted Average Price ...

    Examine a few indicators and oscillators that could be used to complement the volume-weighted average price (VWAP) in a technical ... Read Answer >>
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