Order Flow Toxicity

How one-sided the aggressive trading is, used as a read on whether informed money is pushing.

Order flow is called toxic when the aggressive side is persistently one-directional, so market makers keep filling trades that immediately go against them. It is a description of imbalance, not of intent or of anyone being wrong. The standard measure is VPIN, computed from taker-signed volume grouped into equal-volume buckets rather than equal-time ones, which keeps the reading comparable between a quiet hour and a violent one. The number matters only against its own history: an absolute VPIN value means nothing without knowing what this symbol usually prints. Elevated readings have historically clustered near volatility expansions and liquidation cascades, which is a statement about what tends to accompany them, not a prediction.

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Other terms

Funding Rate
Periodic payment between perpetual futures longs and shorts that keeps the contr...
Open Interest
Total notional value of all open futures positions at a given moment....
Basis
Price gap between a futures contract and its underlying spot index....
Mark Price
The exchange's fair-value price for a perpetual, derived from the spot index plu...
Liquidation
Forced closure of a leveraged position when its margin is exhausted....
Profit Factor
Ratio of gross winning trades to gross losing trades. Above 1 means the strategy...

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