Spoofing in Finance: A Manipulative Tactic
Spoofing, in the context of finance, is a manipulative trading tactic involving placing orders with the intention of canceling them before they are executed. This deceptive practice is designed to create a false impression of market supply or demand, thereby influencing other traders and artificially moving prices. It’s illegal in many jurisdictions, including the United States, due to its distorting effect on fair and transparent markets.