Phantom liquidity

Phantom liquidity is displayed depth that disappears the moment anyone tries to trade against it. Some of it is innocent — market makers cancelling as prices move — and some of it is spoofing. The two are distinguished by intent at the moment of placement, not by the cancellation itself.

market microstructure · updated 2026-09-08

Where does phantom liquidity come up?

This term is used in the following manipulation techniques, each explained in full on its own page.

• Spoofing — Spoofing is placing orders a trader intends to cancel before execution, to create a false impression of supply or demand and move the price toward a smaller genuine order on the other side.

Enforcement actions involving these techniques

See also

• Spoofing — Spoofing is placing orders with the intention of cancelling them before execution, so that other participants misread the order bo…
• Bona fide order — A bona fide order is one placed with a genuine intention to trade if the market reaches it. The concept does most of the work in s…

Terms that refer here

Liquidity · Slippage

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