Layering (Finance)

Layering is a high-frequency trading strategy in which a trader places and then cancels orders they never intend to have executed, in order to influence a stock's price. To buy at a lower price, for example, the trader enters sell orders at or below the market's best asking price, which can cause other participants to lower their own asking prices as they perceive rising selling pressure; the trader may place further sell orders at successively lower prices as the market falls, then make a genuine purchase at the now-lower price and cancel every sell order that was never meant to execute. Layering is treated as a form of stock market manipulation. This description is adapted from Wikipedia contributors under CC BY-SA 4.0; changes were made. https://creativecommons.org/licenses/by-sa/4.0/