''Front running. If you trade stock or other investments because you know that an upcoming transaction by a third party is likely to affect the market price of the investment, you're front running.'' got that from a website
the illusion is they do the reality is, who really knows, and what do they do with that information? ask Madoff ask other frauds ask other scam artists ask other market participants clearly either they're going to have to prosecute so many more or risk their deterrance as of no account
imagine in a hypothetical world, that big hedge funds used a secret formula D ) to enter trades on stocks,now let's say your average retail trader gets a whiff of this formula and figures it out and then places limit orders in front of dark pools , is it then 'front running'/illegal ?
A similar scenario is front running price movement. Technical traders collect "tells" from the markets. Their specific interest is in collecting the market's offer at an optimum money velocity. All the above is outside of the box vis a vis the financial industry. Historically, a while back computers were introduced into the mix of the financial industry's operations. You can imagine the computer industry sales and marketing people looking at the sales opportunity the government represented. In particular outfits like the IRS and the SEC. They made some sales. The government hired computer operators, etc... What ensued was "big brother" monitoring accounts of market participants. The brokerage firms also began to do the same. Time passes and there is some growth and maturing. The home offices of brokerage firms are building reearch on what is happening. The government is looking at the scenery as well. From your post, we can see that you do not get the contemporary picture. That is cool for you to think as you do. If you look back through the eyes of someone who was subjected to brokerage and government scutinany during the formative years of mainframe usage and zero utility, you might be able to get a better picture. Frontrunning the markets is easy. It has no dependency on individual operators of big money. There is a technical parasitic market consideration, however. Sooner or later the brokerage houses and the government surveilance came to understand that some people and some organizations were doing some things that had a profile. These activities fell into two categories and they appeared to be identical. Neither brokers nor the government could divide what was going on into the two categories. By making assumptions, they figured out to their satisfaction that only illegal wrongdoing was going on. These assumptions were not made public. Assumed wrongdoing was prosecuted. Getting these people who misjudged to correct their ways was an arduous task espcially since it was in the context of lawyers from the financial industry. Later, at some point the brokers took it upon themsleves to coattail trade exonerated traders. But the brokers committed crimes in doing so and were subsequently prosecuted and convincted. To use a firefighting term, there was some "blow back". This made it necessary to lean on the poor performance of brokers who seemed to be casual on occasion. Some had an attitude of comparing traders who performed to brokers who only earned commissions. The cost of trading has always been trivial. In ET, often members use themselves as standards. That happened with brokers and it happened with regulators. Records measure performance and not the standards of various parties. You are a "bad guy" if your performance is outstanding and unbelievable and astonishing. That has been true before computers and since computers. Obviously, the expereince at ET is entertainment. The experience vis a vis brokers is determined and unfortunate and they turn it to sleezy ways of making more commissions and gaining favor of whales. The expereince with regulators is "out of this world". The saving grace is the routing of the prosecution. Brokers serve as a firewall since they are the data source. It is grotesque to be attacked by "know nothings". As you see in ET, it is impossible to educate the vast majority of the population. People who work in regulation are not incentivized in any way. Brokers are incentivized to bending the rules to get more money. As a parasitic technician I get to laugh all the way to the bank now that the government has been put in its place. I like having the profile of an insider trader and not being an insider trader. Consult Larry Harris's book to see how parasitic technical traders frontrun the markets by the use of technical analysis and trend analysis. Do not confuse this with trend following which is more about barn doors being left open. People who act on "tips" are not traders. The regulators are supposed to deal with those who profer "insider information". Often they focus on the recipients of insider information. Nap time; just did this post to wind down.
how about this; imagine that there is a technique among big money that frequently pushes the market, if someone was todl this would it be illegal to jump in front of the orders?
Originaly the SEC, when they began to use computers, could not differentiate between parasitic technicians who frontrun or "insider traders" acting on tips (non public information). Today, the SEC has learned to not fool around mistakenly with expert traders. The SEC also misses most criminal trading simply because they are inept and have no incentives to perform. By reading many of your posts, it appears that you cannot take advantage of either skilled trading or helpful informantion for making money (no matter where it would come from in the spectrum). In other words, you will not come up for flagging by the SEC.