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Strategies & Market Trends : Banned.......Replies to the A@P thread. -- Ignore unavailable to you. Want to Upgrade?


To: manny_velasco who wrote (1818)1/9/2005 1:43:06 PM
From: StockDung  Respond to of 5425
 
frontrunning relates to broker.

frontrunning

Among the regulations designed to protect investors is the prohibition against certain kinds of frontrunning. This occurs when a broker, knowing that his client is about to trade, trades ahead of him in the same or a related security. This is a clear conflict of interest because the broker knows that the client may push the security price in the direction of the trade. If this happens, the broker finds that he has bought in (or sold out) only to find the security subsequently rising (or falling) in price. In addition, the customer, coming in later, may receive a less advantageous price should his broker’s trade have moved the price against him. Regulations concerning frontrunning are still in the process of being defined. Another type of frontrunning, which is clearly illegal in the US, is the practice of effecting an options transaction based upon nonpublic information regarding an impending block transaction in the underlying asset, in order to obtain a profit when the option market adjusts to the price at which the block trades.



To: manny_velasco who wrote (1818)1/9/2005 1:51:01 PM
From: StockDung  Read Replies (1) | Respond to of 5425
 
Terms of Use
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