Enter the typical price, the interval volume, and cumulative volume into the calculator to determine the volume average weighted pricing (VWAP).

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## 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

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