An Overview of Market Manipulation

Abstract

In this chapter, I describe the various forms of market manipulation, ranging from classical pump and dump schemes, bear raids, and painting the tape, through to recent forms of manipulation such as spoofing, layering, pinging, and quote stuffing. I discuss the defining elements of market manipulation, including recent legislative changes that seek to keep pace with the changing nature of market manipulation. Finally, I review what is and is not known on the topic of market manipulation based on academic studies, discuss the challenges of analyzing market manipulation, and suggest future research directions.

Keywords: market manipulation, spoofing, layering, pump and dump, painting the tape, bear raid