Q. Which of the following statement explains the term “Front Running”?
Red Book
Red Book

[A] Domination of few private players in production of goods

[B] .Scientific trail of medicines before rolling out the medicine for human consumption

[C] Advancement in socio-economic indicators by developed countries in comparison to developing and Least Developed Countries

[D] .A dubious market practice in which a dealer, trader or employee places big orders before the official trade to get profits.

Answer: A
Notes:

Front-running is a dubious market practice in which a dealer, trader or employee gets wind of a big order for buying or selling shares that will be placed by a fund or big investor and get ‘in front’ of the trade.

Large orders usually move a stock’s price. By buying shares just before the big order hits the market and selling them once the price moves up, the front-runner pockets illegal gains from his advanced knowledge.

Source: The Business Line


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