Weighted Average Definition

A weighted average assigns different levels of importance to individual values based on a specific factor, such as size or volume.

What is a Weighted Average?

In finance, weighted averages are commonly used to calculate figures such as average cost or index values.

This differs from a simple average, where every value is treated equally.

Calculating the average purchase price of shares bought in different quantities at different prices uses a weighted average.

A wedge pattern is a chart formation where price consolidates between two converging trend lines, signaling a potential breakout.

A whipsaw is a rapid price movement in one direction followed quickly by a sharp reversal, often triggering losses for trend-following traders.

Working capital is the difference between a company's current assets and current liabilities, reflecting its short-term financial health.