A VWAP algo forecasts the stock's intraday volume profile, typically from weeks of history, then trades its share of each interval. Because vwap is the most widely quoted execution benchmark, "I got VWAP" is the standard defence of a fill.
It is a benchmark-tracking tool, not an alpha tool. If you have information and the price is about to move, matching VWAP means losing slowly on the whole order.
Example: the profile says 14% of volume trades before 10:30. A 200,000-share VWAP order therefore aims to do about 28,000 shares in that window. Finish the day at 50.09 against a session VWAP of 50.11 and you have beaten the benchmark by two cents, worth $4,000.
Related: twap-algo, participation-rate, algorithmic-order, benchmark-close