When an employee executes a personal trade in advance of a client's or institution's order to benefit from the anticipated movement in the market price following the execution of a large trade, it is called:
A) front running
B) ex ante trading
C) insider dealing
D) forward-facing

Question

Quizplus · Accepted Answer

This scenario is known as front running, where the employee takes advantage of their knowledge of a pending trade by executing a personal trade before the client's or institution's trade, thereby benefiting from an expected price movement in the market. This practice is generally considered unethical and illegal. "Ex ante trading" and "forward-facing" are not commonly used terms in finance, and "insider dealing" refers to trading based on non-public information, which may or may not be related to pending client orders.

When an Employee Executes a Personal Trade in Advance of a Client's