LAYERING PRACTICE: IMPLEMENTATION MECHANISM AND LEGISLATIVE BARRIERS
Layering – this is a high frequency trading strategy, where does the trader do, and then cancels orders, which they never intend to carry out in the hope of influencing the share price. For example, to buy shares at a lower price, the trader first places orders to sell at or below the market price High Frequency Trading, depending on the strategies used, has a different effect on the market condition. Some of them are draining liquidity from the market, other – add liquidity to the market. Many of them are the cause of sudden unexpected movements in market quotations., and also generate new borderline methods of unethical, and sometimes illegal income generation on stock exchanges. Such a controversial practice is the layering method., the essence of which is to create the possibility of artificially shifting the quotations of purchases and sales of securities in order to force the rest of the exchange market participants to make a profitable deal for the manipulator.