👉 Penny engineering refers to a set of practices used by financial market participants, particularly in the realm of algorithmic trading and high-frequency trading, to manipulate market prices or create artificial demand and supply. The term originates from the idea of "penny stocks," which are small-cap stocks trading at very low prices, often around $0.01 per share. In penny engineering, traders use sophisticated algorithms to execute trades at extremely low costs and high speeds, often exploiting tiny price discrepancies or creating artificial ones through large volumes of trades. This can lead to market volatility, reduced liquidity, and unfair advantages for those with the resources to engage in such practices, ultimately affecting market integrity and fairness.
