Spoofing
Spoofing is a disruptive algorithmic trading activity employed by traders to outpace other market participants and to manipulate markets.[1][2][3][4] Spoofers feign interest in trading futures, stocks and other products in financial markets creating an illusion of the demand and supply of the traded asset. In an order driven market, spoofers post a relatively large number of limit orders on one side of the limit order book to make other market participants believe that there is pressure to sell (limit orders are posted on the offer side of the book) or to buy (limit orders are posted on the bid side of the book) the asset.
Layering
Layering is a strategy in high-frequency trading where a trader makes and then cancels orders that they never intend to have executed in hopes of influencing the stock price. For instance, to buy stock at a lower price, the trader initially places orders to sell at or below the market ask price. This may cause the market’s best ask price to fall as other market participants lower their asking prices because they perceive selling pressure as they see the sell orders being entered on the order book. The trader may place subsequent sell orders for the security at successively lower prices as the best ask price falls (to increase the appearance of selling interest). After the price has fallen sufficiently, the trader makes a real trade, buying the stock at the now lower best ask price, and cancels all the sell orders. It is considered a form of stock market manipulation.
Front Running
Front-running is trading stock or any other financial asset by a broker who has inside knowledge of a future transaction that is about to affect its price substantially. A broker may also front-run based on insider knowledge that his or her firm is about to issue a buy or sell recommendation to clients that will almost certainly affect the price of an asset.
This exploitation of information that is not yet public is illegal and unethical in almost all cases.
Front-running is also called tailgating.
