Order Book Quote Stuffing

Order book quote stuffing is a malicious or unintended strategy where an actor floods the market with a massive volume of orders and cancellations. The goal is to increase the latency of the exchange's matching engine or to confuse other market participants' algorithms.

By overwhelming the system, the attacker can gain an advantage by executing their own trades while the exchange is processing the artificial traffic. This technique distorts the visual representation of supply and demand, making it difficult for honest participants to determine the true market price.

In high-frequency environments, this can lead to temporary system freezes or data processing errors. Regulators and exchange operators implement rate limits and penalize excessive cancellations to prevent this behavior from destabilizing the order book.