Forum Archive Index - October 2001

[Adam Rands <adamlist@iguana2.com>]

Gerry

You have made me very nervous... I will do my best :)

VWAP stands for Volume Weighted Average Price

Investorwords.com defines VWAP as 

"A measure of the price at which the majority of a given day's
trading in a given security took place. Calculated by taking the weighted
average of the prices of each trade. The method is used by institutional
traders, who often break a given trade into multiple transactions.
"

Iguana2 agrees with this definition

VWAP is calculated by taking the current total value and dividing it by
the total volume. (all trades are included)

Some investors find VWAP particular useful when they are buying and
selling stock. If an investor buys stock at $4.00 and the VWAP for the
day was $4.03 then it could be said that the investor bought the stock
cheap on the day.

Institutions refer to VWAP a lot more than private investors. If a broker
has a large order to fill the Insto (the brokers client) will insist that
the broker buys(or sells) the stock as close as possible to the days
VWAP.

The VWAP figure can be found on the "course of trades" page on
SNM

Another feature on SNM many would of missed is that the intraday chart
plots the VWAP price. Its displayed as a light gray line in the
background.

Hope this help

Adam


At 09:26 AM 4/10/2001, you wrote:
> I believe
> that Stockness is one of the heaviest frequented sites in
> Australasia.
>  
> One of the reasons, Aussie traders like it,
> because it has the V.W.A.P value, which is based on a weighted value of
> shares traded.
>  
> What we need now is for the Iguana staff
> to very carefully explain the following:
>  
> What do these letters mean?
>  
> What period of time does it apply
> to?
>  
> I may use these answers at some stage and quote
> Iguana and therefore would welcome precise answers.
>  
> Thanks for your attention,
>  
> Gerry
>  
>