medium · Market Microstructure
A 'spoofing' trader wants to buy 10,000 shares of a stock currently quoted at $50.00 bid and $50.02 ask. They place a large fake sell order for 50,000 shares at $50.01, causing the bid to drop to $49.95.
If the trader then buys their 10,000 shares at $49.96 and cancels the fake order, how much did they 'save' compared to buying at the original ask?
- $500
- $400
- $600
- $5,000
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