why is the volume weighted average price important 
vwap gives traders a smoothed out indication of a security s price adjusted for volume over time in addition it is used by institutional traders to ensure that their trades do not move the price of the security they are trying to buy or sell too extremely for example a hedge fund might refrain from submitting a buy order for a price above the security s vwap in order to avoid artificially inflating the price of that security likewise it might avoid submitting orders too far below the vwap so that the price is not dragged down by its sale 