Learn Algorithmic Trading

Banging the close

Banging the close is a disruptive and manipulative trading practice that still happens periodically in electronic trading markets, either intentionally or accidentally, by trading algorithms. This practice has to do with illegally manipulating the closing price of a derivative, also known as the settlement price. Since positions in derivatives markets such as futures are marked at the settlement price at the end of the day, this tactic uses large orders during the final few minutes or seconds of closing where many market participants are out of the market already to drive less liquid market prices in an illegal and disruptive way.

This is, in some sense, similar to spoofing, but in this case, often, the participants banging ...