SIE practice questionhardMarket Manipulation - Spoofing
A trader places large orders with no intent to execute, hoping to move the price and then cancels them. This prohibited activity is called:
- AArbitrage
- BLegitimate block trading
- CSpoofing✓ Correct answer
- DStabilization
Explanation
Why C — Spoofing
Spoofing is the practice of submitting fake orders to mislead other investors and move prices. Block trading, arbitrage, and stabilization are legal when carried out in good faith.
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