Spoofers feign interest in trading futures, stocks and other products in financial markets creating an illusion of exchange pessimism in the futures market when many offers are being cancelled or withdrawn, or false optimism or demand when many offers are being placed in bad faith.[4] Spoofers bid or offer with intent to cancel before the orders are filled. The flurry of activity around the buy or sell orders is intended to attract other high-frequency traders (HFT) to induce a particular market reaction such as manipulating the market price of a security. Spoofing can be a factor in the rise and fall of the price of shares and can be very profitable to the spoofer who can time buying and selling based on this manipulation.[2][5][6] Under the 2010 Dodd-Frank Act spoofing is defined as "the illegal practice of bidding or offering with intent to cancel before execution."
Thanks T.C. Fascinating to say the least. Throw in the HFT's front-running your orders and one can see what a cut throat market it really is. I would like to hear your thoughts on how the HF's naked short and not show up on the FTD list. The brokerages doing the lending just say they have the shares available for loan and no one follows through to check? I know GS got a slap on the wrist for this but cheaper to pay the fine because it's so profitable? Always appreciate your insight.