Is this legal? Is it legal when you hear that I'm buying Teldar Paper and you decide to buy a little for yourself and your friends. Is it legal when some CEO decide its time to blow out XYZ company? Relax Buddy. No one's going to blow the whistle on you. -Gordon Gekko
I know of systems that have "front-run" keys on the keyboard, always to keep the price as the best bid/ offer.
So what, it's a free market. If you want to buy stock, take the offer, and stop fondling the bid, then no one can front run squat.
Quite often when I hit on a MM's offer they give me only 100 shares and move the rest higher.This is common with options also.
It's perfectly legal for an MM or specialist to step in front of your bid. The rationale is the MM isn't competing with your order, they're just moving up the bid so the seller gets a "better price." You'll see it a lot in low volume stocks.
The only way the seller gets a better price is if the MM gives a higher bid.If the MM bids at my price he does nothing for the seller. Once again.My bid is put in away from the action at a price no else is using.In two seconds a MM mimics me with a bid in front of mine.It has got to be a puter program.If the action moves away the MM's take away their bid.If the action comes back the MM's again put their same price bid in front of mine. Every now and then the stock exchanges put out PR about how they want the little guy to have a fair chance against the pros.They are lying.
Yes, they are lying. And, yes it probably is a computer program. But, that doesn't change the fact that it is legal.