What is Away Account Spoofing?
Away account spoofing is a market-manipulative process whereby a trader, via one broker’s platform, enters a single (or multiple) visible orders in symbols with wide spreads, that causes the best bid or offer (NBBO) to improve, or creates a sizable added volume. These effects could be even further enlarged when other market participants are enticed to joining in in entering the same trades. At the same time while these orders were live, or shortly after they were cancelled, the same trader, but now on another broker’s platform, would turn around to benefit from the improved NBBO and liquidity, by executing trades on the opposite side of the market.
It is important to note that Away Account Spoofing is a prohibitive trading activity. Generally, we will send out account alerts at the initial occurrence; any subsequent occurrence could lead to account trading restriction.