With respect to commodity futures and options, taking a futures or option position based upon non-public information regarding an impending transaction by another person in the same or related future or option.
If you buy or sell a stock, stock option, or other investment because you know that an upcoming market transaction is likely to affect the market price of the investment, youre frontrunning. Because frontrunning, sometimes known as forward trading, relies on information that isnt available to the general public, its considered unethical in certain circumstances. One example is a broker-dealer who trades at a better price for a personal account than for a clients account. But on the commodities markets, where frontrunning is called dual trading, its an accepted practice.