Enter the typical price, the interval volume, and cumulative volume into the calculator to determine the volume average weighted pricing (VWAP).
- WACC Calculator (Weighted Average Cost of Capital
- Value At Risk (VAR) Calculator
- RSI (Relative Strength Index) Calculator
- MACD Calculator
VWAP Formula
The following formula is used to calculate a volume average weighted price (VWAP).
VWAP = TP * IV / CV
- Where VWAP is the volume average weighted pricing
- TP is the typical price
- IV is the interval volume
- CV is the cumulative volume
To calculate the volume weighted average pricing, multiply the typical price by the interval volume, then divide by the cumulative volume.
The typical price can be calculated as:
TP = (HP+LP+CP) / 3
- Where HP is the high price for the period
- LP is the low price for the period
- CP is the closing price for the period
VWAP Definition
What is VWAP?
VWAP stands for the volume-weighted average price and it is used to track the price of a stock of a trading period when taking into account trading volumes hence the portion in the name of “volume average weighted”.
Example Problem
how to calculate VWAP.
- First, determine the typical pricing.
Using the high price, low price, and closing price of the period, the typical price is found to be $20.00.
- Next, determine the interval volume.
For the interval in question, the volume traded was found to be 10,000 shares.
- Next, determine the cumulative volume.
Over the course of the day, the cumulative volume has been 50,000 shares.
- Finally, calculate the VWAP.
Using the formula above, the VWAP is calculated to be:
VWAP = TP * IV / CV
VWAP = $20 * 10000 /50000
VWAP = 4
