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# Bid & Ask Cumulative Delta

## Definition

**Bid & Ask Cumulative Delta** tracks the **cumulative difference between resting buy (bid) and sell (ask) orders** on the order book over a specific timeframe. It measures the **net liquidity imbalance** between passive buy and sell orders, offering insight into the **supply and demand dynamics** waiting to be executed.

#### **Key Concept:**

* **Bid Liquidity:** The total volume of passive buy (bid) orders resting in the order book.
* **Ask Liquidity:** The total volume of passive sell (ask) orders resting in the order book.
* **Delta:** The difference between bid liquidity and ask liquidity at each point in time.
* **Cumulative Delta:** The running total (cumulative sum) of these differences over time.

Cumulative Delta=∑(Bid Liquidity−Ask Liquidity)

#### **Depth Parameters:**

The **Bid & Ask Cumulative Delta** is analyzed across various **order book depth levels**, each representing a range of liquidity from the mid-price:

* **Quote:** Best bid and ask prices.
* **1% Depth:** Orders within 1% of the mid-price.
* **2% Depth:** Orders within 2% of the mid-price.
* **5% Depth:** Orders within 5% of the mid-price.
* **10% Depth:** Orders within 10% of the mid-price.
* **20% Depth:** Orders within 20% of the mid-price.
* **Full Book:** All visible liquidity across the entire order book.

Each depth level provides a unique perspective on **liquidity concentration and imbalance**, offering clarity on market sentiment across varying price ranges.