In business, the time weighted average price, or TWAP, of a stock is used to find the average price of a stock that fluctuates over a defined period of time. This number is generally useful for investors who generate small orders at a rapid pace. As long as you have access to the prices of the stock and total trades made over a given period, you can calculate the TWAP using a simple formula.
Instructions
1 Determine the sum of all of the trade prices for the stock in a given time period. This number will be referred to as "n."
2 Find the number of total trades made in the same given time. To find the number of trades (volume) made in a given time, find the stock's profile, located in the website of its stock exchange. For example, to visit the profile for MBT Financial Corp (MBTF), go to the NASDAQ website (see References). This number will be referred to as "t."
3 Divide n by t to find the TWAP.
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