Eli5 What does the term spoofing in finance mean?
In: 42
ELI5: a trader starts throwing out fake trading information on securities to make it appear that the price of a security is trending in a direction that would help them financially. For instance if a trader owns a bunch of Euro, they might start “faking” trades successively to make it appear that the price of the Euro is rising throughout the day. They then swoop in and sell their Euro at this higher “spoofed” price to profit. Basically they put out fraudulent information to the market to make it appear as though people are trading securities at higher and higher prices.
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