What is a 'Real' Transaction? Infrastructures, relations and Spoofing in High-Frequency Trading

Abstract

Although an old and rare practice, spoofing has re-emerged as a subject ofintense debate within modern financial markets. An activity entailing thefraudulent creation of orders to buy and sell securities with the purposeof manipulating the market, spoofing highlights the multiple and complexmoral valences of contemporary, automated, finance. In this paper, I studyspoofing as an opportunity to understand markets and their relations ofexchange. In particular, by extending Weberian metaphors of markets asmoral and organizational communities, I examine how the courts and marketparticipants distinguish the ‘false’ transactions of spoofing from the‘real’ exchanges of 'normal' market behavior. Combining Marilyn Strathern’stheoretical discussion of the anthropological relation with recentliteratures on infrastructures and markets, I argue that the perceivedreality of transactions is a product of how novel forms of economicknowledge are able to make sense of ‘taken for granted’ behavioral patternswithin digital platforms of market action. The intent that constitutes‘real’ trades is therefore a product of how market participants, economicexperts and the courts interpret the operational underbelly of markets andthe relations that they produce.