FxPro Help Centre - Glossary

Front Running

Front Running refers to the unethical practice of a broker or trader executing orders on a security or asset for their own benefit before executing orders on behalf of their clients. In essence, front running involves placing orders based on advance knowledge of pending orders from other market participants, such as institutional investors or clients, with the intention of profiting from the anticipated price movement resulting from those orders.

This practice can occur in various financial markets, including stocks, bonds, commodities, and currencies. Front running is considered a violation of securities regulations and is prohibited by most financial regulatory authorities worldwide.

Front running undermines market integrity and fairness by disadvantaging other market participants who are not privy to the advance information. It can also erode trust in the financial markets and damage the reputation of the individuals or institutions involved. Regulatory authorities closely monitor for instances of front running and impose severe penalties on those found guilty of engaging in this unethical behavior.