You Can Bluff but You Should Not Spoof

Abstract

Spoofing is the act of placing orders to buy or sell a financial contract without the intention to have those orders fulfilled in order to create the impression that there is a large demand for that contract at that price. In this article, I deny the view that spoofing in financial markets should be viewed as morally permissible analogously to the way bluffing is permissible in poker. I argue for the pro tanto moral impermissibility of spoofing and make the case that spoofing is disanalogous from bluffing in at least one important regard—speculative trading serves an important economic role, whereas poker does not.