Definition, Meaning & Synonyms

frontrunning

noun

/ˈfrʌntrʌnɪŋ/

Definition

Frontrunning is the unethical practice of a broker executing orders on a security for its own account while taking advantage of advance knowledge of pending orders from its customers.

Examples

Many in the financial industry see frontrunning as a serious violation of ethics.
The trader was accused of frontrunning after making profits from clients’ undisclosed trades.
This practice can undermine trust in the financial markets.

Meaning

In finance, frontrunning refers to the act of anticipating a client’s order and making a trade based on that knowledge, thus benefiting from the price movement before the client’s order can be executed.