The phrase “front-running” was not created from an accepted derivation. As an adjective the phrase is defined as being ahead in a race or competition . The phrase is often used in political realms and in athletics to describe a candidate for office that has distinguished his/her self from other competitors or a runner in a race that is leading his/her competitors. As a noun, the phrase describes the practice of lending support to a competitor because they are in front . In financial terms, the phrase describes the action of making advance market deals in front of others. Regardless of the form the phrase takes, adjective or noun, the prepositional phrase “in front of” or in “advance” is implied; the use of the preposition signals that a preemptive action has taken place in a competitive environment.
When the phrase “front-running” is used as a political or athletic term, it accurately describes the environment. Without prior knowledge of the term, a person can make an accurate assumption that the activity involves a race and the front-runner is leading the group. Traditionally political and athletic environments are thought to be competitive, they involve winners and losers. However, the stock market is viewed differently. According to the private investor Kennon (2013), the average person views the stock market and investing as they do casino gambling. People who are not market savvy invest in a stock and hope that it performs well with the understanding that there are winners and losers. In most cases, they don’t view investing in the stock market in the same way they view athletic competitions and political races. In the latter, it is usually assumed that each competitor has an equal opportunity to emerge victorious. In the stock market, the competitors are not well defined, novice investors cannot be certain if they are trying to beat the market, other investors, or other companies. Consequently when the phrase front-runner is used in this setting, it does not clearly define who is winning and who is losing; therefore, I believe it is an ineffective non-descriptive phrase.
An effective definition or phrase should provide an effective explanation not lend confusion. Besides being a confusing definition, the phrase encompasses a hidden premise that there is a secret competition that operates at the disadvantage of inexperienced investors. The use of the phrase perpetuates the mistrust that most people have with the market and its agents, especially since the recent stock market crash. If brokers and agents ever hope to reestablish trust with the public and attract new investors, they can start by using more transparent and less intimidating terms.
- Front-running. (2013). Definition of in Oxford Dictionaries (US English) (US). Retrieved March 18, 2013, from http://oxforddictionaries.com/us/definition/american_english/front-running
- Kennon, J. (2013). Investing Lesson 1 – Introduction to the Stock Market. About.com Investing for Beginners. Retrieved March 16, 2013, from http://beginnersinvest.about.com/cs/investinglessons/a/aaless1intro_2.htm