Volume Weighted Average Price - VWAP
A trading benchmark particularly used in pension plans. VWAP is calculated by adding up the dollars traded for every transaction (price times shares traded) and then dividing by the total shares traded for the day.
Investopedia Commentary
The theory is that if the price of a buy trade is lower than the VWAP, it is a good trade. The opposite is true if the price is higher than the VWAP.
See also: Pension Plan
Also spelled: VWAP