Spoofing Quiz Answers

February 29, 2016 12:00 PM
  1. Yes: This is classic spoofing.
  2. Yes: This is “flipping,” a form of spoofing.
  3. Yes: This is “layering” and perhaps “momentum ignition,” a form of spoofing.
  4. No: Icebergs, while misleading, are expressly permitted.
  5. DK: Your guess is as good as mine.
  6. No: Fill or Kill and Fill and Kill are permitted even though they may appear to the market the same as a “flashed” spoof order.
  7. No: If it is Exchange sanctioned it is probably not spoofing.
  8. No: Since it wasn’t your intent to cancel when you entered the orders it is probably not spoofing but try and convince a jury of that.
  9. Yes: Because it was your intent to cancel your bids once you made your sale.
  10. Yes: The CME mentions this type of activity in their explanation of Rule 575.

Score:

1 wrong: Great job but close only counts in horseshoes and nuclear weapons, not HFT compliance and not post-Dodd-Frank  

2 wrong: Don’t spend profits too quickly; orange is the new black

3+ wrong: Stop trading unless you work for a major investment bank

About the Author

Editor-in-Chief of Modern Trader, Daniel Collins is a 25-year veteran of the futures industry having worked on the trading floors of both the Chicago Board of Trade and Chicago Mercantile Exchange.