Spoofing
Also called: layering
Placing large orders with no intention of letting them trade, to create a false impression of demand or supply, then cancelling them.
A spoofer might place large buy orders below the market price so that demand looks strong, sell to the buyers who react, and cancel the large orders before they can be filled. It abuses the order book that everyone relies on and is a form of market manipulation.
Learn more in these lessons
- Market manipulationHow is the stock market manipulated, and how is it caught?
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