Front-running is a deceptive practice in the financial world where someone with privileged information uses it to make trades for their own benefit before a larger transaction takes place. This essentially allows them to "jump the queue" and profit from the price movements caused by the bigger trade.
Here's a breakdown of how a front-running case might occur:
Insider Knowledge: An individual, typically a broker or someone with access to confidential trade information, learns about a large upcoming buy or sell order for a particular security.
Preemptive Trade: They exploit this knowledge by placing their own smaller order to buy (if it's a large upcoming buy order) or sell (if it's a large upcoming sell order) before the bigger trade is executed.
Price Movement: Once the larger order hits the market, it drives the price up (for a buy order) or down (for a sell order).
Unfair Advantage: The front-runner then benefits by selling their shares at a higher price (if they bought beforehand) or buying at a lower price (if they sold beforehand), essentially profiting unfairly at the expense of others.
Front-running is considered illegal and unethical because it undermines fair market practices and gives an unfair advantage to someone with access to non-public information. Regulatory bodies like the SEBI in India have measures in place to prevent and penalize such activities.
Don't forget to hit the subscribe button and turn on notifications for more informative content from Investegy!
TO JOIN WHATSAPP CHANNEL:
[ Ссылка ]
Subscribe👇
[ Ссылка ]
HELPFUL LINKS:
To open a Lifetime free Demat and Trading Account of UPSTOX
[ Ссылка ]
TO OPEN A FREE 3 IN 1 ICICI BANK ACCOUNT [SAVINGS+DEMAT+TRADING]:
[ Ссылка ]
WHATSAPP LINK FOR ANY TYPE OF INVESTMENT: [ Ссылка ]
*AMFI Registration Number - ARN -138523
*Employee Unique I'd Number- EUIN- E234641
Get in touch:
*Mobile No. 9833782250
*Email address: sharma.ravi1185@gmail.com
TAGS:
mutual fund investment
Investegy
Investment strategy
#investments #investment #risk #riskmanagement #frontrunningcase #whatisfrontrunning
#frontrunning #fixedincome #plans #large #midcap #power #infrastructure #consumer #consumption #psu #recoveryjourney #small #smallcap #midcap #midcapstocks #bestportfolio #portfolio #portfoliomanagement #best #bestmoments #energy #plans #sbi #schemes #lumpsum #ek #onetime #one #sip #key #patience #success #swp #karodpati #crore #crorepatischemes #moneymaking #notes #successmindset #successmotivation #nivesh #market #india #indiaisgrowing #indian #growth #growthmindset #investmentplan #consumption ##consumer #50lakhs #pharma #pharmacy #health #healthcare #opportunities #retirementplanning #best #small #multicap #portfolio #5crore #scheme #schemes #earning #through #mutualfund #1lakh #sensex #plans #planning #2024 #best #scheme #schemes #scheme2024 #plans #sbi #onetime #lumpsum #sbibestschemes #number #bestinvestment #plans #complete #solution #solutions #consumption #consumer #bestportfolio #money #making #schemes #hdfc #swp #sip #best #plans #expert #advice #advise #amc #charge #multi #multicap #compoundinterest #hdfc #hdfcmutualfund #bestinvestment #mutualfund #complete #plans #guaranteed #return #big #something #investmentplan #believe #india #growingup #dividend #paying #stocks #advantages #5best #powerofpatience #power #of #patience #powerofcompounding #compound #nipponindiagrowthfund #investmentplan #investegy #award #EventHighlights #PMModi #mygov #mygov #youtube
