The Passive Agressive Order Type

Rampant Spoofing, or is this One Big Spoof Spoof?

The arbitrage strategy raises another question: Could you spoof the \$SPY ETF market with orders in the futures market? If so, how would regulators catch this? It seems difficult to impossible to catch subtle spoofing that is a small part of a large complex inter-market strategy. Some people believe this spoofing is widespread, but if this belief is widespread people would be cautious making spoofing less effective.

Some spoofing is easily identifiable. According to the criminal complaint, the spoofer repeatedly entered fake orders for either 188 or 289 contracts. That is pretty dumb. Orders like these are screaming to be noticed. Any higher frequency data analyst should be on the look out for bread crumbs like this, and more complex ones. Would-be spoofers could identify his spoofing and ride his illegal coattails. In this scenario there would not be many spoofers since they only need one guy to do the dirty work. Why would spoofing be widespread if you could reap the rewards without taking the legal risk?