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Tailgating

 

The action of a broker or advisor purchasing or selling a security for his or her client(s) and then immediately making the same transaction in his or her own account.

Investopedia Says:
This is not illegal like front running, but it is not looked upon favorably because the broker is mostly likely placing a trade for his or her own account based on what the client knows (like inside information).

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To bamboozle someone out of their money is an age-old ruse. Learn about some of the gimmicks modern-day swindlers use and avoid becoming a statistic. Online Investment Scams Tutorial


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Unethical practice of a broker who, after a customer has placed an order to buy or sell a certain security, places an order for the same security for his or her own account. The broker hopes to profit either because of information the customer is known or presumed to have or because the customer's purchase is of sufficient size to put pressure on the security price.

Wikipedia: Tailgating
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Tailgating is the practice of driving on a road too closely behind another vehicle, such as less than the travel distance in two seconds or, equivalently, one vehicle-length for every 8 km/h (5 mph) of the current speed, at 60km/h it is about 33m. Australian rule book describe tailgating as a distance which does not guarantee that stopping to avoid collision is possible.

In some municipalities in the United States and in all the European Union, this action is illegal and punishable by fine.

Causes

There can be several reasons for tailgating:

  • Tailgating can occur because of a lack of perceived risk in so doing. Thus, it is done unconsciously or negligently, very often by people who consider themselves safe drivers and generally obey the other rules of the road. Approximately one third of rear-end collisions involve tailgating.[1]
  • In its worst form, it can be a particularly virulent form of road rage and a form of intimidation. An example would be where the tailgating driver (the driver in the following vehicle) threatens damage to the leading vehicle and its occupants by driving aggressively — perhaps also with use of headlights and horn — to bully the leading vehicle's driver to get out of the way. The driver being tailgated might not wish to comply, especially if doing so would involve breaking the law, such as by increasing speed beyond the speed limit or changing lanes without due regard for safety. Note, however, that in many jurisdictions flashing high beams is a normal and polite method used to signal the intention to overtake[1]. Tailgating can also be dangerous to the tailgater, especially if he or she is driving closely behind a large vehicle (such as a tractor-trailer, or gas tanker). If the leading vehicle decelerates suddenly (such as when encountering a traffic jam, traffic lights, avoiding pedestrians, etc.), the tailgater has a high risk of causing a rear-end collision.
  • A driver may switch into a lane in front of another driver, but without adequate clearance. The second driver is now unintentionally "tailgating" the first driver, although this is due to the first driver's unsafe behavior.
  • A form of deliberate tailgating known as slipstreaming, "draft-assisted forced stop", or "draft-assisted forced auto stop" (D-FAS) is a technique which has been used by people known as hypermilers to achieve greater fuel economy. D-FAS involves turning off the engine and gliding in neutral while tailgating a larger vehicle, in order to take advantage of the reduced wind resistance in its immediate wake.[2] Note that this practice is extremely dangerous: while tailgating itself is inherently risky, the danger of collision is increased with D-FAS as power for power brakes can be lost after a few applications of the brake pedal and, with older cars, the pressure that causes power steering to function can be lost as well.[3]
  • A driver is driving slower than the flow of traffic while in one of the faster lanes of a multi-lane road. A faster driver approaching from behind wishing to overtake may tailgate to indicate this desire to the slower driver in front and attempt to make him change lanes.
  • A driver travelling at a higher speed reaches a car traveling in the same direction at a lower speed, and the faster driver may tailgate while awaiting the first opportunity to overtake. Such expressions of impatience may be conscious or unconscious, and also dangerous.

References

External links


 
 

 

Copyrights:

Investment Dictionary. Copyright ©2000, Investopedia.com - Owned and Operated by Investopedia Inc. All rights reserved.  Read more
Financial & Investment Dictionary. Dictionary of Finance and Investment Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.  Read more
Wikipedia. This article is licensed under the Creative Commons Attribution/Share-Alike License. It uses material from the Wikipedia article "Tailgating" Read more

 

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