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front running in stocks...not much information here
- Thread starter TGpop
- Start date
Anybody can make up some silly "secret formula".
Front-running occurs when a broker takes an order from a client and jumps (or runs) in front of it in their own account, then fills the client's order. It's an abuse of the broker-client relationship.
Flash trading would be an alternate example of front running. It requires definite prior knowledge that a particular order will take place.
You mentioned orders resting in the order book, these are public knowledge and there is no guarantee that any given order will be filled. It's market orders or orders that take liquidity that move the price anyways.
Is this starting to make sense?
Front-running occurs when a broker takes an order from a client and jumps (or runs) in front of it in their own account, then fills the client's order. It's an abuse of the broker-client relationship.
Flash trading would be an alternate example of front running. It requires definite prior knowledge that a particular order will take place.
You mentioned orders resting in the order book, these are public knowledge and there is no guarantee that any given order will be filled. It's market orders or orders that take liquidity that move the price anyways.
Is this starting to make sense?
actually it's a setup, but it's secret and it frequently causes large price moves , 4-5% and i'm not giving any examples, i'm not entirely sure whether, since it's:
1) secret
2) used by large traders, many who will be using dark pools
whether it counts as front running, and of course it doesn't work 100% of the time either
1) secret
2) used by large traders, many who will be using dark pools
whether it counts as front running, and of course it doesn't work 100% of the time either