Front running is the illegal practice of a stockbroker executing orders on a security for its own account while taking advantage of advance knowledge of pending orders from its customers. When orders previously submitted by its customers will predictably affect the price of the security, purchasing first for its own account gives the broker an unfair advantage, since it can expect to close out its position at a profit based on the new price level. The front running broker either buys for his own account (before filling customer buy orders that drive up the price), or sells (where the broker sells for its own account, before filling customer sell orders that drive down the price).
Allegations of front running occasionally arise in stock and commodity exchanges, in scandals concerning floor brokers and exchange specialists.
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Famous quotes containing the words front and/or running:
“Culture is a sham if it is only a sort of Gothic front put on an iron building—like Tower Bridge—or a classical front put on a steel frame—like the Daily Telegraph building in Fleet Street. Culture, if it is to be a real thing and a holy thing, must be the product of what we actually do for a living—not something added, like sugar on a pill.”
—Eric Gill (1882–1940)
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day at the beach without ending up a skinless beet,
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