Frontrunning

Simple Definition of Frontrunning
  • Front-running is trading stock or any other financial asset by a broker who has inside knowledge of a future transaction that is about to affect its price substantially. A broker may also front-run based on insider knowledge that their firm is about to issue a buy or sell recommendation to clients that will almost certainly affect the price of an asset.
  • Front-running is a stock market phrase that refers to using insider information about impending deals to enter the market ahead of the competition. As a result, it's a type of insider trading.
  • Front-running is not limited to the stock market and the decentralized finance (DeFi) space — it can happen in the nonfungible token (NFT) marketplaces, too. It occurs because an insider at an NFT platform knows which NFTs are going to be featured heavily on the trading site.