Institutional and Non-Institutional Investors

Institutional investors are the mutual funds, retirement funds, insurance companies, investment banks, endowment funds, commercial trusts, hedge funds, and some hedge fund investors, which are financially sophisticated and makes large investments, often held in large portfolios of investments.

Institutional investors are called – the elephants. This is a slang for large institutions that make trades in very high volumes. One elephant trade can dramatically move the market price for a security. Meditate of a swimming pool: if an elephant stepped into the pool, the water level (stock price) would increase considerably, and if an elephant got out of the pool, the water level (stock price) would decrease meaningly.

Non-institutional investors are any investors that aren't institutional. That's pretty much everyone who buys and sells equity, debt or other investments through a bank, real estate agent, broker and etc. These are organizations or the people that manage their own money, in most cases to scheme for retirement or to save for a large purchase. Such as Institutional investors, non-institutional investors have the slang-word – "mouse". Because in comparison to the elephants' influence on stock prices, the result of an individual investor is more like that of a mouse.

Institutional investors account for half part of the volume of trades on the New York Stock Exchange. They move large blocks of shares and have colossal influence on the stock market's movements. Because they're considered to be knowledgeable and, therefore, less likely to make uneducated investments, institutional investors are subject to few of the safety regulations that the SEC (Securities and Exchange Commission) provides to your everyday, average investor.

In essence institutional investor, an accredited investor is defined in the rule as:

- a insurance company, bank, registered investment company (generally a mutual fund), business development company, or small business investment company;
- an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
- a philanthropic corporation, organization or partnership with assets exceeding $5 million;
- a business in which all the equity owners are accredited investors;
- a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase;
- a trust with assets in excess of $5 million, not formed to get the securities offered, whose purchases a sophisticated person makes.