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A couple of readers have asked variations of the same question so I will
attempt to answer it: 

What does front running mean?

Front running is the practice whereby traders try to jump in front of
large trades to take advantage of the expected price movement that
regularly accompanies a large trade.   For example, suppose you were a
mutual fund manager trying to buy a large position in a stock.

If this news reached the street, small investors would buy the shares and
hope that as you buy the shares the stock price would rise.  When spreads
were larger this practice carried more risk as the stock price might not
climb and the trader (speculator) would have to risk selling at a loss
(remember the shares were bought at the ask, but sold back at the bid
price).  When spreads have narrowed (as is the case with decimalization)
this lowered the risk of trying to cut in line. 

Recently this was back in the news as mutual fund managers fought having
to disclose their holdings more often.  Why?  The managers are afraid that
if they begin selling XYZ stock and everyone knows how much XYZ stock the
fund owns, the likelihood of other speculators selling increases and the
mutual fund would not get as good of price. 

Note: from a running perspective it means trying to win a race from the
front rather than waiting and kicking.     LOL…sorry I couldn’t resist.
 

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