Front Running

Definition

Trading ahead of client orders by using insider knowledge of pending transactions; highly illegal and incredibly profitable if caught slowly.

Example Usage

The trader was convicted of front running after buying shares minutes before executing a large client buy order.

Origin

From getting in front of another's position before they execute it.

Fun Fact

High-frequency trading algorithms are essentially legal front running—they frontrun slower market participants using speed.

Source: Securities fraud, market regulation

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