VWAP (Volume Weighted Average Price) refers to the average price weighted by trading volume within a specific time frame on an exchange. In simple terms, it is the average price calculated based on the volume of trades.

VWAP is widely used in financial markets, particularly in stocks and forex, and is calculated as follows:
1. Multiply the price of each trade by its corresponding volume.
2. Divide the sum of these values by the total volume during the period.

VWAP is used by traders and institutional investors to execute trades while minimizing the impact on market prices. It is also used as an indicator of the “fair price” or “average transaction price” in the market at a given time.

In short, VWAP reflects the market’s average price and serves as an important reference point, especially in trade execution.