VWAP (Volume-Weighted Average Price)

VWAP is the average price of an asset over a period, weighted by the volume traded at each price. Because it accounts for where volume actually happened, it’s a truer “average” than a simple price mean and serves as a benchmark for whether a trade executed well (below VWAP for a buy is good).

Institutions use VWAP to judge execution and to slice large orders without moving the market. Traders also read intraday VWAP as a dynamic fair-value line — price above it suggests intraday bullishness, below it bearishness. It’s most meaningful on shorter timeframes and higher-volume assets; on thin or long horizons its usefulness fades.