Volume Weighted Average Price, or VWAP, is an important indicator often used by day traders and institutional investors alike. Understanding the VWAP meaning and the VWAP calculation can help drive better buy and sell decisions.

What Is The Volume Weighted Average Price (VWAP)?
The volume-weighted average price, or VWAP, is the average price of a stock over a period of time, adjusted for the volume of those trades.

Because of the volume component, VWAP assigns more weight to larger trades. And because it’s an average price across the period of time, VWAP offers a smoother view of the trading trend during the day.

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