beating the VWAP

M

manustone

HI All
I am newbie to trading and it is not really clear what does it mean 'beat the VWAP'.
I don't understand the math I need to do in order to understand whether I "beat" it or not.

I have the following 2 doubts:

1. Is this meaning that the Average Prices of ALL of MY trades ( both BUY and SELL order executed )
I do during the day must have a better price of the VWAP calculated at the end over all of the trades
of the day?

So in terms of formula

P_avg >= VWAP_end_of_day

2. Maybe I am confused, but should I make a distinguish between price for BUY order vs SELL order?
Let me be more clear:
# If a Buy order is executed, the price should be LOWER than the VWAP of the day
# If a Sell order is executed, the price should be HIGHER than the VWAP of the day

So in terms of formula

P_BUY_avg <= VWAP_end_of_day
P_SELL_avg >= VWAP_end_of_day

It is probably a silly concept , but I am really newbie.

Regards
Mnstn
 
The term "beating the VWAP" refers to executing a large order at a price that is better than VWAP. In other words, you want to have an average buying price that is below the VWAP, and an average selling price above the VWAP.
 
Quote from MTE:

The term "beating the VWAP" refers to executing a large order at a price that is better than VWAP. In other words, you want to have an average buying price that is below the VWAP, and an average selling price above the VWAP.
More...

Any pointers about how to "beat the VWAP" in terms of trading/execution strategies?
 
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