Quote-stuffing tactics (also known as filling tactics)

In the course of high-frequency trading on the stock exchange, a trader sends out a large number of orders per second, only to cancel them again immediately without executing them. The resulting high rate of cancellations sends the wrong signals. This is because it leads to a strong discrepancy between the indicated liquidity of the market and the actual trading volume. An investor who places an order in response to a bid or ask is therefore often unable to execute the transaction at the displayed limit. In order to reduce the resulting non-transparency of the market, a restriction is required for quote stuffing. Accordingly, each trader should only be allowed to submit a certain number of quotes per transaction. – See algorithm trading, bid-ask spread, day trading, high frequency trading, market trading, market manipulation, sell-plus-order.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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