front-running
UK[ˈfrʌnt ˌrʌnɪŋ]US[ˈfrʌnt ˌrʌnɪŋ]
n
The unethical practice of a broker or other entity trading on a security for its own account while having advance knowledge of pending orders from its clients, in order to profit from the expected price movement.
n
More broadly, any practice of taking advantage of advance, non-public information to secure an advantageous position before others can act.
Morpheme Breakdown
front
running
front
foremost position
running
act of moving swiftly
Etymology
The term "front-running" is a modern financial compound formed from two native English words. "Front," with its Latin roots meaning "forehead," evolved to denote the foremost position in a line or sequence. "Running" derives from a common Germanic verb for rapid motion. The compound's logic is vividly metaphorical: it describes the act of "running ahead" of others to the front of the queue. Originally used in stock and commodities trading, it paints a picture of a trader exploiting privileged knowledge to execute a personal trade swiftly in front of a large pending client order that will move the market, thereby securing a profit from the anticipated price change. This literal imagery of getting to the front of the line effectively captures the unethical core of the practice.
Analysis
Structure: front (foremost position) + running (act of moving swiftly)
• front: From Old French front, from Latin frons (forehead, front). In this compound, it signifies the foremost or leading position.
• running: From Old English rinnan, iernan (to run). In this compound, it signifies the act of moving swiftly or operating.
Examples
The regulator fined the brokerage firm for engaging in front-running its clients' large block orders.
In high-frequency trading, sophisticated algorithms can be used for illegal front-running strategies.
The new policy aims to prevent front-running by increasing transparency in order execution.