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What Specific SEC or FINRA Rules Prohibit Front-Running in Traditional Options?

SEC Rule 10b-5 and FINRA rules on fair trading prohibit the use of non-public customer order information for personal gain.
Greeks.Live11.11.25

What Specific SEC or FINRA Rules Prohibit Front-Running in Traditional Options?

Front-running in traditional US markets is primarily prohibited under the anti-fraud provisions of the Securities Exchange Act of 1934, specifically Rule 10b-5, which covers manipulative and deceptive practices. Additionally, FINRA rules, such as those concerning "just and equitable principles of trade," specifically prohibit the misuse of non-public customer order information by brokers or market makers to trade ahead of the client.

Violations are prosecuted as market manipulation or insider trading.

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