front running in stocks...not much information here

Discussion in 'Stocks' started by TGpop, Aug 30, 2010.

  1. front-running is by definition illegal. There's not multiple-types of front-running. If what you're doing is legal then you are not front-running.
     
    #21     Sep 3, 2010
  2. TGpop

    TGpop

    then is my example front running?
     
    #22     Sep 4, 2010
  3. nLepwa

    nLepwa

    No.

    Ninna
     
    #23     Sep 4, 2010
  4. TGpop

    TGpop

    im baffled, because surely a secret formula is non public information?
     
    #24     Sep 4, 2010
  5. 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?
     
    #25     Sep 4, 2010
  6. TGpop

    TGpop

    ok, the formula doesn't work 100% of the time, but i'm pretty sure it uses dark pools of liquidty, then that's got to be illegal? no, i'm not a broker with 100% certainty that a client has a large limit order.
     
    #26     Sep 4, 2010
  7. Surdo

    Surdo

    Why are DLP's illegal, oh because you don't know how to gain access to them???
     
    #27     Sep 4, 2010
  8. TGpop

    TGpop

    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
     
    #28     Sep 5, 2010
  9. no.

    front running is a market-maker taking the same side of a client order before the client gets the trade.
     
    #29     Sep 5, 2010
  10. TGpop

    TGpop

    but i've heard stories where traders have got, for example, articles from popular financial journalists early and traded, and were sued and declared a fraud, somehow i think my setup/formula is pretty similar
     
    #30     Sep 5, 2010