hard · Market Microstructure adverse-selection
A 'parasitic' trader detects a large institutional buy order being worked.
Which of the following legal strategies is most likely to be employed by this trader?
- Buying in front of the expected order flow to sell back later at a higher price
- Contacting the institutional trader directly to negotiate a private block trade
- Executing a wash trade with an affiliated account to create fake reported volume
- Placing a spoofing order on the book to induce a short-term price reversal
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