Spoofing is an illegal manipulation tactic of placing large orders with no intent to execute them, to create a false impression of supply or demand and trick other traders. It’s a banned practice.

How it works

A spoofer places large limit orders on the book — say big buy orders — to make it look like strong demand, luring others to buy and push price up. Then, before the fake orders execute, the spoofer cancels them and trades the opposite way, profiting from the move they engineered. The orders were never meant to fill — they were a bluff to move the tape.

Why it's illegal

Spoofing deceives the market with fake order-book pressure, distorting price discovery and defrauding traders who react to the phantom orders. It’s explicitly illegal (prosecuted under market-manipulation laws), and exchanges/regulators use surveillance to detect it. It’s in the same manipulation family as wash trading and front-running.

Spoofing is a bluff in order form: flash fake size to move the market, cancel before it fills, and trade the reaction. Illegal, because it’s a lie.

The takeaway

Spoofing is illegal fake-order manipulation — a reason to read order-book “pressure” with some skepticism (though it’s heavily policed). It’s market-structure literacy that explains why the tape can occasionally mislead. NoVo trades dealer structure, not fleeting order-book flickers.