Average price

Average price,

Definition of Average price:

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

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

  3. 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.

  4. 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?

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

Meaning of Average price & Average price Definition