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I got sucked into a finance rabbit hole and I have been reading about some "tricks" in market making and I don't see why these are problematic? Even if it is a

I got sucked into a finance rabbit hole and I have been reading about some "tricks" in market making and I don't see why these are problematic? Even if it is a problem, how would you even prove it? Is it wrong to place an ask order at much lower price, then backing off if it doesn't work out? Should I just put my limit order and let it stay there? 1. https://en.wikipedia.org/wiki/Spoofing_(financhttps://en.wikipedia.org/wiki/2010_flash_crashe) https://en.wikipedia.org/wiki/Spoofing_(financhttps://en.wik... 2. https://en.wikipedia.org/wiki/Layering_(finance) https://en.wikipedia.org/wiki/Layering_(finance) 3. https://en.wikipedia.org/wiki/2010_flash_crash https://en.wikipedia.org/wiki/2010_flash_crash

alexpetralia 3y ago
No, placing orders and then canceling them is very common and makes up the majority of orders. It is not spoofing. Spoofing is about the intent to mislead the market.
reverend_gonzo 3y ago
It’s all about intent. If you place a bonafide order with the intent of it getting, but at a later time (1ms is fine) decide that is no longer a good price, you are cancel it. However, if you place an order that you do not intend to get filled to make the market think there is demand when there actually isn’t, that is illegal. So, how do they prove this? Well, proving intent is hard, unless you’re dumb enough to send emails saying, for example, you want a smart order type that won’t get filled.