Often I have come across several articles in internet about brokers/ Investment banks “hunting” their clients’ stop orders and also about Front running their client orders.
Stop hunting is supposed to be taking out large stop orders of clients just in time before market moves in opposite direction of stop order. Front running is if client (s) place a large order for a particular scrip, then brokerages /investment banks place similar order in front of the client’s order so as to take advantage of market move when the client’s large order hits the market.
Today there is a proof for one of the theory, i.e front running. a HSBC’s currency trader has been convicted of front running customer orders. A related news from Bloomberg:
