Institutional investor definition

facebooktwittergoogle_plusredditlinkedinmail

Synonyms: Institutional Investor
Short form:
English:. institutional investor

Definition 1:

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 are faced with fewer protective regulations because it is assumed that they have more knowledge and are better able to protect themselves.

To see what the big money is buying, can sometimes serve as a good indicator, because they (presumably) know what they are doing. Some examples of institutional investors are pension funds and life insurance companies.

Definition 2:

This term refers primarily institutional investors, such as mutual funds and insurance companies that invest the cash available to them into shares. The designation as an institutional investor says nothing about the actual financial strength.

It can not be basically assumed that an institutional investor has a price-sensitive power. Only when many institutions to trade in one direction, thereby courses and markets can be affected long term.