Volume-Weighted Average Price
The average traded price over a period, weighted by the volume executed at each price.
Formula
VWAP = Sum of (Price x Volume) / Sum of Volume
Unit
₹
In depth
VWAP is the standard benchmark for execution quality: an institutional buyer wants to fill below the day's VWAP, a seller above it. It weights by volume, so it reflects where the money actually traded rather than where the price merely visited, which makes it far more robust than a simple average of prices. India's official closing price is a VWAP of the last thirty minutes for the same reason. Traders often use intraday VWAP as a support or resistance line, which is a different and much weaker claim than its use as a benchmark.
Worked example
Trades of 1,000 at ₹300, 3,000 at ₹310 and 6,000 at ₹306: VWAP = (3,00,000 + 9,30,000 + 18,36,000) / 10,000 = 30,66,000 / 10,000 = ₹306.60. A simple price average would give ₹305.33, which no one actually paid.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Volume-Weighted Average Price” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.