Learn Algorithmic Trading

Spoofing

Spoofing typically refers to the practice of entering orders into the market that are not considered bonafide. A bonafide order is one that is entered with the intent of trading. Spoofing orders are entered into the market with the intent of misleading other market participants, and these orders were never entered with the intent of being executed. The purpose of these orders is to make other participants believe that there are more real market participants who are willing to buy or sell than there actually are. By spoofing on the bid side, market participants are misled into thinking there is a lot of interest in buying. This usually leads to other market participants adding more orders to the bid side and moving or removing orders ...