SIE practice questionhardOrder Types / Manipulation
A trader places successive small orders to gradually move a stock price up, then sells a large position at the new price. This pattern is known as:
- AAllowed for institutional traders
- BPermissible trading as long as orders are real
- CLayering, which is illegal market manipulation✓ Correct answer
- DAcceptable during volatile markets
Explanation
Why C — Layering, which is illegal market manipulation
Layering is the use of multiple small trades to manipulate prices, an illegal practice under securities law, regardless of market conditions or client type.
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