VWAP (Volume Weighted Average Price)

VWAP is the average price a stock traded at throughout the day, weighted by how many shares changed hands at each price level. Instead of treating every trade equally, VWAP gives more importance to prices where lots of volume occurred. You'll see traders use it to spot whether they got a good deal on a purchase—if you bought below VWAP, you beat the day's average; if you bought above it, you overpaid relative to the crowd. Think of it like this: if a stock traded 1,000 shares at $50 and 10,000 shares at $51, VWAP would be much closer to $51 because most of the action happened there. It's a quick reality check on whether your entry price was smart.