Quote Stuffing
Submitting and immediately cancelling huge volumes of orders to slow other participants' systems, mask intent or create noise that benefits the issuer.
Definition
Quote stuffing is the practice of entering and rapidly cancelling unusually large numbers of orders in a financial instrument with the effect of slowing other participants' systems, creating a misleading impression of activity or masking the issuer's true trading intent.
Regulatory anchor
EU MAR Article 12(2)(d); MiFID II Article 48 obliges trading venues to set message-throttling controls and order-to-trade ratio limits; ESMA RTS 9 prescribes thresholds.
Detection signature
- Order submission rate above the venue's published threshold for prolonged bursts.
- Cancellation-to-execution ratio above 99% with no economic rationale.
- Correlated latency degradation at the venue around the bursts.
Why it matters in crypto
While historically a HFT-era issue on traditional venues, quote stuffing patterns are now observed on centralised crypto venues with API-trading clients and on aggregator front-ends. ESMA has signalled it expects CASPs to apply MiFID-style throttling controls.