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Investopedia explains 'Trading Ahead'
Trading ahead was initially prohibited by NYSE Rule 92. Subsequently, in order to reduce regulatory duplication and streamline compliance, the NYSE and AMEX replaced Rule 92 with FINRA Rule 5320 with effect from Sept. 12, 2011.
FINRA Rule 5320 prohibits a member firm that accepts a customer order for a security, but does not execute it, from trading the security for the firm's proprietary account at a price that would have satisfied the customer order. However, the firm can redeem the situation by immediately thereafter executing the customer order at a price that is at least the same, if not better, than the price it obtained for its own account. Otherwise it would be a violation of Rule 5320.
There are certain exceptions to Rule 5320, including exceptions for large orders and institutional orders, a "no-knowledge" exception and an odd lot and bona fide error transaction exception.
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