piggyback

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Piggybacking

The practice in which a broker conducts a transaction on his/her own account after filling a similar order on behalf of a client. For example, if a client sells 10,000 shares and the broker owns some shares in the same company, he may piggyback by selling his own shares. A broker piggybacks when he/she believes that the client has insider information, or at least a better understanding than the broker on the market's future movements. Piggybacking should not be confused with piggy back registration, which is a different concept altogether.

piggyback

1. A broker trading in his or her personal account after trading in the same security for a customer. The broker may believe the customer has access to privileged information that will cause the transaction to be profitable.

Piggyback.

A broker who piggybacks acts illegally by buying or selling a security for his or her own account after -- and presumably because -- a client has authorized that same transaction.

One speculation is that a broker in this situation thinks the client is acting on information that the broker doesn't have.

References in periodicals archive ?
Piggyback loans -- so called because a second mortgage is piggybacked on to a first to compensate for a smaller down payment -- have become common in recent years as housing prices have appreciated.
While other organizations offer fiber optic calibration services, these capabilities are often piggybacked onto existing scopes of calibration.
The Petro-Canada Pict contract award involves the design, manufacture and installation of an 18km 12" production pipeline piggybacked with a 4" gas lift pipeline, an 18km 6" gas lift pipeline and an 11.