SIE practice questionhardSpoofing
Placing a large order to buy or sell with the intent to cancel it before execution to mislead other market participants about supply and demand is known as:
- APrearranged trading
- BParking
- CScalping
- DLayering / spoofing✓ Correct answer
Explanation
Why D — Layering / spoofing
Spoofing, also called layering, involves placing orders with the intent to cancel them before execution to create a false impression of supply or demand. Scalping is buying ahead of a recommendation, and parking is hiding ownership of securities.
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