What Is “Spoofing” and How Might a Fixing Process Be Designed to Mitigate It?
Spoofing is a manipulative trading practice where a trader places large, non-bona fide orders (orders they intend to cancel before execution) to create a false impression of supply or demand. A fixing process can mitigate this by excluding canceled orders from the volume-based calculations or by using a price-sampling methodology that is less reliant on the immediate order book.
Glossar
Spoofing Illegal
Deception ⎊ Spoofing illegal, within cryptocurrency, options trading, and financial derivatives, represents a manipulative tactic involving the creation of non-bona fide orders with the intent to mislead market participants regarding supply or demand.
Spoofing
Action ⎊ Spoofing, within cryptocurrency derivatives and options markets, represents a deceptive trading practice involving the placement of orders intended to create a false impression of market activity or interest, without the actual intention to execute those orders.
Fixing Process
Determination ⎊ This refers to the precise, pre-agreed methodology for establishing a reference price or rate at a specific point in time for contract settlement.
Volume-Based Calculations
Metric ⎊ Volume-based calculations are quantitative metrics derived from the total trading activity of an asset over a specified period.