Volume Weighted Average Price - VWAP

What Does Volume Weighted Average Price - VWAP Mean?
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.

Investopedia explains 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.

Related Terms

Pension Plan
Per Share Basis
Volume
Weighted
Weighted Average
More Related Terms

Related Links

Analyzing Pension Risk - Determine the risk to a company's EPS and financial condition resulting from an underfunded defined-benefit pension plan.
How To Evaluate Pension Risk By Analyzing Annual Costs - Learn how to assess whether a company's pension plan is posing more risks than what the footnotes indicate.
How do I figure out my cost basis on a stock investment?

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