VWAP (volume weighted average price)

CFA Level III
#1

Traders time their trades until VWIP makes their trading cost appear favorable.Trader can trade at favorable bids and asks by waiting orders to be brought to the trader . In both these cases, traders might forgo profits through delay.

Can someone explain why dealer may forgo profits through delay ?

#2

More likely a broker than a dealer.

A trader’s year-end bonus might depend on how often he beats the VWAP.