“Trade Concentration” definition
Trade concentration occurs when the volume of orders or trades for a financial asset is exceptionally high on a specific day compared to the norm observed on previous days. This situation can be detected by analyzing trading data and can be an indicator of potentially problematic behavior in the market.
How to identify Trade Concentration ?
Here are some key factors to consider :
1. Indicator of potential manipulation
A sudden and significant concentration of orders or trades can be a sign of market manipulation, attempts to manipulate prices, or other illegal activities. Market manipulation may include practices such as spoofing (creating fictitious orders to influence prices) or layering (superimposing orders to deceive other investors).
2. Comparative analysis
To assess whether trade concentration is suspicious, it is common to compare the trading volume on the day in question with historical volume levels observed on similar days or preceding days. If the concentration is significantly higher than usual, it may raise the attention of regulators and analysts.
“Front Running News” : Key Elements
1. Front Running (Pre-information trading)
Front running is a practice where a market participant utilizes non-public or advance information to take positions before this information becomes available to the general public. This may involve buying or selling financial assets in anticipation of an event or announcement that is likely to influence prices.
2. Insider Trading
Front running often involves the use of insider information, making it a form of insider trading. Insider information is non-public information that, if made public, could significantly influence trading decisions.
