An illegal act in which a broker or other representative, just before filling a large order on behalf of a client, conducts a transaction in the same security on his/her own account. A large order to buy or sell usually affects the price of a security; the broker conducts the transaction hoping to profit on the movement in price after he/she fills the client's order. This is a form of insider trading, as the broker filling the order knows something about the market's probable movement that other market participants do not know. It is also known as tape racing.
An illegal transaction technique in which a registered representative takes advantage of a large customer order by transacting business for a personal account before transacting the customer's order. A registered representative with a significant order likely to affect the price of a security can take personal advantage of that situation by tape racing.