Unfortunately, there are various types of investment scams that are out there. This article will give you some basic information about these types of scams. While the risk of losing money on these investments is relatively low, the risks of becoming a victim of one are much higher. There are several different types of scams, and you should avoid investing in these products altogether. However, there are some ways to avoid being a victim of these frauds.
Spoofing a trade is another type of commodity scam. Traditionally, this type of fraud involves placing large bids and then canceling them immediately. However, in recent years, CFTC regulators have seen new patterns emerge. Many traders coordinate their strategies and place both bogus and genuine orders on the same side of the market, creating the illusion that buying and selling interests have drastically changed. This practice is illegal and may lead to losses.
A common scam involves a broker using a system that allows them to place a large bid without actually executing it. In some cases, this tactic is also known as spoofing. The CFTC has detected patterns of this kind of practice, which involve coordinating traders’ strategies and spoof orders. This practice creates the illusion of a major change in interest in buying or selling.