What is spoofing at NSE

What is Spoofing?

Spoofing is when someone places a very large buy or sell order in the stock market, but they never actually intend to trade it. The order is just there to trick other traders into thinking there is more demand or supply than really exists.

For example:

• If a spoofer places a huge buy (bid) order below the current price, it can make others think buyers are very eager and might lift the price upward.
• If a spoofer places a huge sell (ask) order above the current price, it can make others think sellers are very eager and might push the price downward.

Traders often react to what they see on the market depth, but spoofing is misleading — it’s like showing fake interest to move prices in a way that benefits the spoofer.

Key points: Spoofing is temporary, often canceled before it executes, and its goal is to manipulate other traders’ behavior to the spoofer’s advantage.

SCOM Market Depth — Bid Side Spoofing

Bid Price (KES)	Bid Quantity	Bid Splits	Ask Price (KES)	Ask Quantity	Ask Splits
15.20	2,500	2	15.40	2,000	2
15.15	3,200	3	15.45	3,500	3
15.10	1,002,000	3	15.50	2,800	2

Bid Side Spoofing — Detailed Commentary

• The large spoofed bid at KES 15.10 (1,002,000 shares) creates a visible illusion of strong buying interest and a support level.

• Primary market effect: Other participants may interpret this as genuine demand and be more willing to sell into that perceived support, which can temporarily lift traded prices.

• Two core intentions behind this bid-side spoofing:

1. Place a counter trade at advantage: The spoofer displays the large bid to attract sellers or mask their true activity, then executes a real sell order (a counter trade) at a more favorable price against the incoming liquidity created by the fake bid.

2. Push price toward the spoofed side to execute at advantage: By creating the impression of demand, the spoofer encourages price movement upward (or prevents price falls), enabling them to execute other orders (often sells placed elsewhere) at a better price once the market has adjusted.

• Regulatory/detection challenge: Spoofing often uses split orders, rapid cancellations, or multiple accounts, so automated filters and human review may not flag it instantly.

• How it misleads price data: Displayed market depth and best-bid metrics can look healthier than actual executed volume — causing traders who rely on book depth to make misinformed decisions.

• Investor advice: Do not take a single large bid at face value. Confirm with trade prints (time & sales), look for follow-through executed volume, and prefer limit orders if entering. If suspicious patterns persist, document and report them to your broker or the regulator (NSE/CMA).

SCOM Market Depth — Ask Side Spoofing

Bid Price (KES)	Bid Quantity	Bid Splits	Ask Price (KES)	Ask Quantity	Ask Splits
15.20	2,200	2	15.40	2,500	2
15.25	2,100	2	15.45	3,000	3
15.15	3,000	3	15.50	1,002,000	3

Ask Side Spoofing — Detailed Commentary

• The huge spoofed ask at KES 15.50 (1,002,000 shares) creates a visible illusion of heavy selling pressure and a resistance level.

• Primary market effect: Other participants may interpret this as genuine supply and either lower their bids or delay buying, which can push traded prices down.

• Two core intentions behind this ask-side spoofing:

1. Place a counter trade at advantage: The spoofer displays large asks to deter buyers or to attract sellers into executing, while the spoofer executes a real buy (counter trade) elsewhere at a more favorable (lower) price.

2. Push price toward the spoofed side to execute at advantage: By creating the appearance of excess supply, the spoofer hopes to drive prices down so they can purchase or cover positions at improved prices once the market shifts.

• Regulatory/detection challenge: Spoofed asks are often canceled or split; detection requires correlation across accounts and time-series analysis.

• How it misleads price data: The visible sell pressure may overstate willingness to execute at those levels; actual trade prints (time & sales) are the reliable source for executed activity.

• Investor advice: Ignore a single very large ask as a sole reason to sell. Verify with executed volume and trades; use limit orders if acting, and report persistent suspicious patterns to brokers or regulators.