SIE practice questionhardOptions Manipulation
An options market maker colludes with another firm to fix options prices away from the prevailing market. This conduct is:
- AIllegal price fixing and market manipulation✓ Correct answer
- BPermitted for liquidity providers
- CAllowed during wide spreads
- DAcceptable if approved by the exchange
Explanation
Why A — Illegal price fixing and market manipulation
Collusion to fix prices is always illegal. Exchanges and spreads do not provide exemptions for antitrust or market manipulation laws.
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