A practice that is used by high frequency traders (also known for this purpose as quote rate pirates) that involves placing and immediately cancelling orders using automated trading systems (ATSs) and algos (algorithms), often to test system latency or identify pockets of liquidity. The orders placed are often large in number and their price is significantly above or below the current market price.
This practice is usually prohibited by regulators.
It is also known as quote stuffing.
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