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Professional & Ethics

Front Running

Also called: frontrunning, trading ahead

Front running is trading ahead of a client order you know is coming, capturing the price move that order will cause. It's a breach of duty rather than a use of inside information about the company — the private information is about order flow. The modern version is contested rather than clear-cut: latency arbitrage that detects and races large orders sits in a grey zone that regulators and exchanges are still arguing over.

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