Spoofing in finance refers to a form of market manipulation where a trader places a large order to buy or sell a security with the intent to cancel it before execution. The goal of spoofing is to create a misleading impression of market demand or supply, influencing other traders' perceptions and behaviors. For example, a trader may place a large buy order to drive the price of a stock up, then sell their existing holdings at the elevated price before canceling the buy order.
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