**Average price, **

### Definition of Average price:

Securities: A calculation using fixed-income securities to determine a securitys yield to maturity, which is then deducted from the purchase price.

Business: A calculated measurement of the average of a range of prices paid for goods or services.

The average price of an asset or security is taken as the simple arithmetic average of closing prices over a specified time period, or over specific periods of duration intraday. For an intraday average price, when adjusted by trading volume, the volume-weighted average price (VWAP) can be derived.

The average price of a bond is calculated by adding its face value to the price paid for it and dividing the sum by two. The average price is sometimes used in determining a bond's yield to maturity where the average price replaces the purchase price in the yield to maturity calculation.

### How to use Average price in a sentence?

- For intraday averages, the volume-weighted average price, or VWAP, is an important metric for traders and investors.
- A bond's average price is computed from its face value and market price and is used to derive its yield to maturity (YTM).
- Average price is the mean price of an asset or security over some period of time.
- For technical traders, moving averages (MAs) are used for a variety of trend and reversal indicators.

Meaning of Average price & Average price Definition