Front-running
Trading ahead of orders you know are coming, such as buying a share before sending a tip that will make others buy it.
A front-runner uses advance knowledge of other people's buying or selling to trade first and profit from the price move those orders cause. In a tip group, an operator might buy a thinly traded share, send the tip to thousands of followers, and sell into their buying.
Using such advance knowledge unfairly is prohibited under SEBI's rules on fraudulent and unfair trade practices.
Learn more in these lessons
- Stock tip groups on Telegram and WhatsAppAre stock tips from Telegram and WhatsApp groups trustworthy?
- Undisclosed conflicts of interestHow do conflicts of interest affect the financial advice you get?
- Market manipulationHow is the stock market manipulated, and how is it caught?
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