easy · Market Microstructure
A high-frequency trader wants to buy 10,000 shares of XYZ at a low price. He places a 50,000-share sell order at 50.01 (just above the bid) to create an illusion of selling pressure, buys the 10,000 shares at 49.95 when others panic, and then cancels the sell order. This is an example of:
- Layering
- Spoofing
- Front-running
- Quote Stuffing
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