WHAT IS SPOOFING

$Opera(OPRA.US)$ Spoofing is a type of disruptive trading behaviour that can occur frequently in the commodities markets, or where there is the use of algorithmic or high frequency trading strategies.

Spoofing (also referred to as ‘layering’) is a term used to describe a form of market manipulation where traders place a bid or offer with no intention of fulfilling it, instead cancelling the bid or offer before execution. The actual form of spoofing can vary, however it usually involves the placing of non-bona fide orders on one side of the order book which are then cancelled immediately or soon after. The purpose of the spoof is usually to artificially move the price of the relevant security or commodity, by creating a false impression of its supply or demand in the market, in order to benefit the trader’s own trading position.