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Security Market Manipulation

Author

Listed:
  • Chester Spatt

    (Tepper School of Business, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213
    National Bureau of Economic Research, Cambridge, Massachusetts 02138)

Abstract

This article uses a variety of contemporary developments to address artificial market pricing and market manipulation. It examines a variety of modern trading tactics and manipulation strategies in the context of trading and order mechanics. For example, I raise the connection between so-called best execution, cancellation rates, and manipulation. I explore the connection between manipulation and short exposures as well as potential connections between Federal Reserve policies and artificial pricing. I also examine the nature of market manipulation in different facets of the trading day and the transitions among these.

Suggested Citation

  • Chester Spatt, 2014. "Security Market Manipulation," Annual Review of Financial Economics, Annual Reviews, vol. 6(1), pages 405-418, December.
    • Handle: RePEc:anr:refeco:v:6:y:2014:p:405-418
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-financial-110613-034232
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    References listed on IDEAS

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    Cited by:

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    2. Vasilios Mavroudis & Hayden Melton, 2019. "Libra: Fair Order-Matching for Electronic Financial Exchanges," Papers 1910.00321, arXiv.org.
    3. John M. Griffin & Amin Shams, 2020. "Is Bitcoin Really Untethered?," Journal of Finance, American Finance Association, vol. 75(4), pages 1913-1964, August.
    4. Titman, Sheridan & Wei, Chishen & Zhao, Bin, 2022. "Corporate actions and the manipulation of retail investors in China: An analysis of stock splits," Journal of Financial Economics, Elsevier, vol. 145(3), pages 762-787.
    5. Park, Seongkyu “Gilbert” & Suen, Wing & Wan, Kam-Ming, 2022. "Call auction design and closing price manipulation: Evidence from the Hong Kong stock exchange," Journal of Financial Markets, Elsevier, vol. 58(C).
    6. Allen, Franklin & Haas, Marlene D. & Nowak, Eric & Tengulov, Angel, 2021. "Market efficiency and limits to arbitrage: Evidence from the Volkswagen short squeeze," Journal of Financial Economics, Elsevier, vol. 142(1), pages 166-194.
    7. Joerg Osterrieder & Daniel Kucharczyk & Silas Rudolf & Daniel Wittwer, 2020. "Neural networks and arbitrage in the VIX," Digital Finance, Springer, vol. 2(1), pages 97-115, September.
    8. Sheridan Titman & Chishen Wei. Wei & Bin Zhao, 2021. "Corporate Actions and the Manipulation of Retail Investors in China: An Analysis of Stock Splits," NBER Working Papers 29212, National Bureau of Economic Research, Inc.
    9. Florian El Mouaaouy, 2018. "Financial crime ‘hot spots’ – empirical evidence from the foreign exchange market," The European Journal of Finance, Taylor & Francis Journals, vol. 24(7-8), pages 565-583, May.

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    More about this item

    Keywords

    manipulation; trading tactics; short selling; opening/closing prices; sniping; quote stuffing;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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