institutional investor

Institutional Investor

A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. Institutional investors face less protective regulations because it is assumed that they are more knowledgeable and better able to protect themselves.

Investopedia Commentary

Watching what the big money is buying can sometimes be a good indicator, as they (supposedly) know what they are doing. Some examples of institutional investors are pension fund and life insurance companies.

Related Links

Institutional Investors And Fundamentals: What's The Link?
Five Investing Pitfalls To Avoid, According to Investor's Business Daily

See also: Block Trade, Elephants, Iceberg Order, Investment Banker, Qualified Institutional Buyer (QIB), Retail Investor

institutional investor

An entity such as an insurance company, an investment company, a pension fund, or a trust department that invests large sums in the securities markets. Institutional investing has had an increasing impact on securities trading: as the institutions buy and sell huge blocks of the same securities during short periods of time, large security fluctuations ensue.