Pre-ejaculatory fluid is secreted by twin structures called the Cowper's glands. These glands are tiny, and they are located at the base of the penis. The fluid they make lubricates the urethra and facilitates semen flow during ejaculation. Pre-ejaculatory fluid starts to seep out during sexual arousal, so it comes out when he's erect. Sexual activity is not necessary to initiate the secretion of the fluid, but it will continue during the sexual activity. Some guys will secrete more fluid than others, so if a guy doesn't seem to be releasing any fluid, it might just be that he's not releasing much fluid. Other guys might release a flood of pre-ejaculatory fluid (though generally more semen is produced than pre-ejaculatory fluid).