Stock Market Glossary
VWAP
Volume weighted average price as an intraday benchmark for execution quality.
In brief: Volume weighted average price as an intraday benchmark for execution quality.
Meaning in practice
VWAP stands for Volume Weighted Average Price. The indicator combines price and trading volume and shows the average price at which a value was actually traded within a session. Traders use VWAP as a fair intraday reference, institutional traders as a benchmark for good or poor execution.
Context for investors and traders
The term helps put market information into context. Its relevance depends on the instrument, investment horizon and current market situation, so it should be read with other data and a personal risk framework.
How to use this in practice
Use the term first to describe the situation and add verifiable data: time frame, benchmark, costs and liquidity. Only then does it become an assessment that can be connected to an investment objective and risk budget.
What to keep in mind
Avoid false precision. Many market terms describe probabilities or historical patterns; they neither guarantee a return nor replace the review of a specific security.
