Definition
CVD, short for Cumulative Volume Delta, is a quantitative concept used in trading to measure the running total of the difference between buying and selling volume. It is built by classifying trades as aggressive buys or aggressive sells and then cumulatively summing the volume imbalance across a sequence of trades or candles. A rising CVD indicates that aggressive buy volume is dominating, while a falling CVD indicates that aggressive sell volume is dominating. As a concept, it focuses on the internal structure of traded volume rather than just price changes.
In markets where Order Flow is closely monitored, CVD serves as a higher-level representation of how liquidity is being consumed over time. It is often applied to derivatives markets such as Futures and Perpetual Futures, where leverage and funding dynamics can amplify the informational content of volume imbalances. Because it tracks the persistence and direction of net aggressive activity, CVD is frequently examined alongside Open Interest to distinguish between position building and position closing. In highly active markets, changes in CVD can also be interpreted in the context of prevailing Volatility, which may affect how quickly volume imbalances translate into price movement.
Context and Usage
CVD is conceptually rooted in order-driven market microstructure, where the interaction between aggressive and passive liquidity shapes short-term price dynamics. It abstracts raw Order Flow into a single cumulative series, making it easier to observe whether buying or selling pressure has been dominant over a chosen period. In derivatives environments such as Futures and Perpetual Futures, this cumulative view can highlight whether leveraged participation is skewed toward one side of the market.
Because CVD is cumulative, its interpretation depends on the timeframe, instrument, and underlying liquidity conditions. When combined with Open Interest, it can conceptually distinguish between net new participation and simple transfer of contracts between existing participants. In phases of elevated Volatility, the same CVD shifts may correspond to more abrupt price moves, while in calmer conditions they may reflect absorption without large price dislocations. Overall, CVD is an advanced order flow concept that characterizes the directional bias of traded volume rather than focusing solely on last-traded price.