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by raviolo
2411 days ago
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HFTs quote in a given symbol, often derivative e.g. “AMZN 2000 strike call option” based on market in another symbol, often outright e.g. “AMZN stock“. They are willing and happy to trade at prices quoted while market in AMZN remains what it is. Once it moves, they re-price their quotes in option(s). Their quote sizes are usually pretty small. Spoofers put out orders without intention to trade. In fact, usually they would be horrified if their entire order trades. Their order price is not based on another market; their only intention is to impact prices in the book where they put the spoofing order. To achieve that, they often use disproportionately large order sizes, such as posting quantity 1000 where most other orders are between 1 and 20. Often they keep “applying the pressure” on the market by modifying the large spoofing order multiple times towards the market - moving the sell order lower and buy order higher - not as a response to changing market conditions in some other instrument but with the sole intention of impacting the price in the book in question. |
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