Manipulation
Manipulation is an attempt to move prices or perceived consensus away from fair value. It is easier in thin markets and can distort benchmark comparisons.
Definition
Manipulation is an attempt to distort a market price or consensus signal, usually to influence perception, publicity, or other positions.
Why it matters for benchmarking
If you use market consensus as a benchmark, manipulation can contaminate the reference probability. This is most likely in a thin market with low liquidity.
Practical safeguards
• prefer mid price or VWAP over last traded price
• use longer consensus windows when volume is sparse
• keep an audit trail for evaluation inputs
Related
Manipulation is closely linked to liquidity conditions and to the reliability of “price as probability”.