Volume-Weighted Average Price (VWAP) Definition

VWAP is the average price of an asset over a trading session, weighted by the volume traded at each price level.

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What is VWAP?

It is commonly used by institutional traders to assess whether they are buying or selling at a favorable price relative to the session's average.

Price trading above VWAP may be viewed as relatively strong, while trading below may be viewed as relatively weak.

Example of Volume-Weighted Average Price

A trader comparing their entry price to the day's VWAP is checking whether their execution was above or below the session average.

More V terms

Value Investing

Value investing is an investment strategy focused on buying securities that appear undervalued relative to their intrinsic worth.

VIX (Volatility Index)

The VIX is an index that measures expected volatility in the U.S. stock market based on S&P 500 index options.

Volatility

Volatility refers to the degree of variation in an asset's price over a given period of time.

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