What does VWAP mean? What is the full form of VWAP?
The Full Form of VWAP is Volume Weighted Average Price.
In finance, volume–weighted average price (VWAP) is the ratio of the value traded to total volume traded over a particular time horizon (usually one day). It is a measure of the average price at which a stock is traded over the trading horizon.
The volume weighted average price (VWAP) is a trading benchmark used by traders that gives the average price a security has traded at throughout the day, based on both volume and price. It is important because it provides traders with insight into both the trend and value of a security.
KEY TAKEAWAYS
- The volume weighted average price (VWAP) appears as a single line on intraday charts (1 minute, 15 minute, and so on), similar to how a moving average looks.
- Retail and professional traders may use the VWAP as part of their trading rules for determining intraday trends.
VWAP is calculated by adding up the dollars traded for every transaction (price multiplied by the number of shares traded) and then dividing by the total shares traded.
VWAP=∑Volume∑Price * Volume
VWAP
means
Volume Weighted Average Price
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