Order Book Manipulation – Spoofing

Spoofing is a quote driven manipulation which involves placing bid / ask orders, with an intent of cancelling the orders before execution, while simultaneously executing trades on opposite side of the order book. The side on which large orders are placed and cancelled is known as "spoof" side and the suspect trader involved in such an activity is called "spoofer".Spoofers are "persistent noise creators" (PNC), since the excessive orders may be attributed as "noise" in the market, with no intention to execute the trade by modifying or cancelling them. Spoofing creates misleading appearance of market depth or direction, to induce honest market participants by providing the spoofer with better execution of spoofer's orders on the opposite side of the order book.