In Finance, What is Tailgating?
Tailgating is also known as piggybacking that is not illegal but unethical, due to the assumptions that the broker is trying to profit from information the broker believes you have about the stock. In financial services (https://48factoring.com) tailgating refers to purchasing of a security from brokers after the broker has placed an order for the same or similar security for a customer.
A broker will typically tailgate only when you buy stock in a sufficient quantity to potentially affect the price of the security.
While most people think of tailgating as an activity that either takes place on the highway or in the parking lots of sports stadiums, the term can also apply to a specific type of activity that takes place with investments. As it relates to finance, tailgating refers to the practice of executing the purchase or sale of a security on behalf of a client, then executing the same action involving the same stock on one’s own behalf. While tailgating of this type is generally associated with brokers, the fact is that anyone who acts as an investing agent for a client can engage in this type of activity. Tailgating is not to be confused with the illegal practice of insider trading. With tailgating, the broker or brokers are following the lead of a client. There is no unlawful access to proprietary information involved with tailgating. By contrast, insider trading involves the acquisition of information that is not considered to be in the public domain, and attempting to benefit from that inf
