Why it matters more than ordinary VWAP: ordinary VWAP resets daily and is mostly useful for intraday trading. Anchored VWAP, set at a meaningful event (earnings release, IPO, all-time high, recent low), tracks where the average market participant is positioned over a relevant timeframe. Above the AVWAP, longs are profitable on average and act as supply on rallies. Below it, longs are underwater and act as demand on dips.
For options strikes: AVWAP is one of the cleanest reference levels for choosing where to sell premium. A short put just below AVWAP from the last earnings release sits below where the average post-earnings buyer is positioned — a level with mechanical buying pressure. The same logic applies in reverse for short calls above AVWAP from a recent low.