What is Frontrunning?

A process prohibited by many platforms and jurisdictions, frontrunning is when an investor enters into an equity trade, derivative, option, futures contract, or security-based swap in order to profit in advance of the trade by obtaining non-public knowledge of a large pending order to in turn purchase a substantial amount of an asset — dramatically impacting the asset's price. Frontrunning, also known as tailgating, is usually considered a form of insider trading or market manipulation that is illegal in many jurisdictions.