VWAP (Volume-Weighted Average Price)

Definition

VWAP (Volume-Weighted Average Price) in plain English

VWAP is the average price of everything traded so far today, but weighted by size — a huge trade counts more than a tiny one. You get it by taking the total dollars spent and dividing by the total shares traded, so it answers "what did the typical share actually cost today?" Big institutions use it as a report card: if they bought below VWAP, they got a good deal; above it, they overpaid. Because so many pros benchmark against it, price often gravitates toward VWAP like a magnet.

Learn these first

• Break-even stop
• True Range (TR)

Related Volume Profile Analysis terms

• Ask
• ATR (Average True Range)
• Auction Market Theory
• Below value
• Bid
• Break-even stop
• Buying tail
• Day type
• Excess
• Excess high / Excess low