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Trading & Technical Analysis

Spoofing

Also called: layering, spoof orders

Spoofing places large orders with no intention of executing them, to create a false impression of supply or demand, then cancels once the price moves. It became explicitly illegal in the US under Dodd-Frank and has produced criminal convictions, including of a trader whose home-based spoofing was linked to the 2010 flash crash. It's detected through cancellation rates rather than through individual orders.

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