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What Is the Risk of a Liquidation Engine ‘Front-Running’ the Market?

The engine's knowledge of a large order could be exploited to trade ahead; exchanges use internal matching to prevent this.
Greeks.Live22.11.25

What Is the Risk of a Liquidation Engine ‘Front-Running’ the Market?

Front-running is a risk where the liquidation engine's knowledge of a large upcoming liquidation order could be used to trade ahead of it for profit. This is highly unethical and illegal in traditional markets.

Exchanges use mechanisms like internal matching and dark pools to minimize the risk of front-running by concealing the liquidation order's size.

Explain the Concept of ‘Front-Running’ and Its Relationship to Slippage
How Does the Transparency of a Public Order Book on a DEX Enable Front-Running?
What Is “Front-Running” and How Is It Exacerbated by a Large Mempool?
What Is the Role of a Centralized Exchange’s Matching Engine in Minimizing Large Order Slippage?

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