Definition

In trading, placing multiple buy or sell orders at different price levels to either manipulate apparent market depth or genuinely scale in/out of positions. Context determines whether it's strategy or securities fraud.

Example Usage

The SEC charged the trader with spoofing through layering—placing fake orders to create false demand before canceling them.

Origin

Trading terminology referring to the visual 'layers' of orders stacked in the order book.

Fun Fact

Legitimate layering (gradually building positions) versus manipulative layering is a gray area that keeps compliance officers employed.

Source: Securities trading and regulation

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