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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
To examine the option, I assumed a homebuyer paid $300,000 in May of 2004, took a 30-year first mortgage of $240,000 at a fixed 5.5 percent rate and a piggyback for $60,000 at a fixed 7.5 percent, with interest only payments for 10 years.
Therefore, the borrower can refinance without having to buy mortgage insurance or take another piggyback.
Shayegan, contacted on his cellphone by the AP, politely declined to speak of the piggyback rides until he could talk to an attorney.
Because of his piggyback antics, he has been banned from high school sporting events in Washington, Oregon, Montana, North Dakota and Minnesota.
The problem for individual borrowers comes when risks are layered on top of each other--for example, a 100 percent LTV piggyback with an IO first mortgage and a HELOC second mortgage.
In his recent paper, "The Hidden Risks of Piggyback Lending," economist Charles Calhoun, an independent consultant and researcher based in Washington, D.C., noted significant concentrations of riskier loans in metropolitan areas at greatest risk of price declines.
Frank Newport, editor in chief of the Gallup Organization and a board member of the National Council on Public Polls, said Gallup's policy is not to piggyback questions without the agreement of the initial client.