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> front running == illegal with futures, I don't know about stocks. "Front running" is only illegal if you're trading on private information. The classic examp
by papercrane 6y ago
> front running == illegal with futures, I don't know about stocks.
"Front running" is only illegal if you're trading on private information. The classic example is a broker receives a large order from a client and before executing it they buy some of the same asset, assuming the clients larger order will drive the price up.
If the information is public though it's not illegal. For example, index funds publicly disclose their balances, and if there is a large market event that means they need to rebalance other traders may rush orders in because they know the index fund is going to buy/sell certain instruments in large volumes. This is legal because all the information is public.