AnalysisResearchToxic Flow
When Volume Is a Trap: Measuring ‘Toxic Flow’ vs Informational Flow
High volume doesn’t mean smart money. In CLOB markets, the key is flow quality: toxic (adverse selection) versus informational (price discovery). This post shows how to measure adverse selection using trades + mid-price reactions, build a followability filter for whale alerts, and reproduce it with public Polymarket APIs.
·13 min