by Gord Collins

Guaranteed VWAP

Brokers offering guaranteed VWAP are accepting the risk themselves. When they quote a guaranteed VWAP execution, they must make the trade at the quoted VWAP price or take the loss themselves. Brokers make buy and sell trades daily in the client order. This differs from a straight effort or best effort trade. A normal or best effort trade, the dealer can be off the VWAP price however these trades should be at a near VWAP price.
The guaranteed VWAP price removes all uncertainty on an order for the client. They get the price they want. Volume weighted average price is generated from market opening to closing price. It is calculated by an average weighting of all transactions during this time period. Guaranteed VWAP prices are computed by Bloomberg and displayed after the markets have closed. Transactions are guaranteed to be executed at those prices.

Smart Execution specializes in algorithmic trading solutions. We offer VWAP, TWAP and Time Slicing strategies to sell large blocks of stock quickly while minimizing market impact. Call SMEX today and learn more about the future of electronic trading.

Algorithmic Trading | Electronic Securities Trading | Guaranteed VWAP | TWAP