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.