Institutional Investor

Institutional investors usually refer to investment companies, mutual funds, hedge funds,brokerages, insurance companies, pension funds, investment banks and so on, which generally invest large amounts of money and are able to pay smaller commissions.  Institutional investors are presumed to be better informed and hence face fewer protective regulations, as compared to individual investors.

Most of the volume is due to trading activities from institutional investors. Some investors attempt to follow investments by institutional investors assuming they have better knowledge (which may or may not be the case.)