of a security
by a broker
after the broker places an order for the same security
for a customer. The broker
hopes to profit
either because of information which the customer has or because the customer's purchase is of sufficient size to affect security
prices. This is an unethical practice.
The act of entering a restricted area without authorization by following a person with authorization. For example, one may enter a door immediately behind a person who has the key. The term implies that the tailgater does not have the consent of the person who has access, but this is not always the case. Tailgating is a violation of security protocol and may be a form of trespassing.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
The placement of an order by a registered representative for the registered representative's own account on the basis of an order that has been received from a client. Suppose a customer calls a registered representative with an order to sell 1,000 shares of stock. If the representative sells the stock for the customer and follows it by selling additional shares of the same stock for his or her own personal account, the representative is tailgating.
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.
When a broker places your order for a security, and then immediately places an order for his or her own account for the same security, the broker is tailgating.
Although this practice, which is also known as piggybacking, isn't illegal, it is considered unethical, because the assumption is that the broker is trying to profit from information the broker believes you have about the stock.
A broker will typically tailgate only when you buy stock in a sufficient quantity to potentially affect the price of the security.