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14 - Disruptive Trading Practices

Published online by Cambridge University Press:  02 October 2020

Gregory Scopino
Affiliation:
Georgetown University, Washington DC
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Summary

The CEA and CFTC Regulations have several provisions that specifically prohibit several specific kinds of trading practices that are categorically considered disruptive or deceptive. Unlike the broad prohibitions against conduct that constitutes malleable and amorphous legal concepts such as fraud and manipulation, the antidisruptive practices proscriptions in the CEA are, generally speaking, more narrow because they explicitly target specific types of trading activities. While these improper disruptive trading practices originated on the crowded trading floors of futures exchanges, many of these tactics have continued to occur in electronic trading environments, such as on CME’s Globex. Indeed, electronic trading environments appear to facilitate some disruptive trading practices. These tactics have colorful names such as spoofing, wash trading, and banging (or marking) the close.

Type
Chapter
Information
Algo Bots and the Law
Technology, Automation, and the Regulation of Futures and Other Derivatives
, pp. 326 - 334
Publisher: Cambridge University Press
Print publication year: 2020

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