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It's not basically front running. Front running is specifically when a broker gets your order and sits on it until either they or another client can trade in fr
by sseveran 7y ago
It's not basically front running. Front running is specifically when a broker gets your order and sits on it until either they or another client can trade in front of it before the market moves. Market makers want to interact with retail orders since they typically don't have size and in aggregate are either non-directional or predictably directional. This reduces the market makers risk of adverse selection.
- hcknwscommenter 7y agoIf you want to define front-running that way, then I agree HFTs don't front-run. But they do step in between buyers and sellers. If you want to call that something else, shrug.
- sseveran 7y agoStepping in between buyers and sellers is called market making. They smooth supply and demand across time. Also I don't define front running that way, FINRA does. https://www.finra.org/rules-guidance/rulebooks/finra-rules/5270?element_id=10860&rbid=2403 https://www.finra.org/rules-guidance/rulebooks/finra-rules/5...
- hcknwscommenter 7y agoYour link contradicts your definition.