FYI: In the world of finance, institutional investors are a powerful force. They dictate supply and demand in the marketplace and play a key role in how securities are priced. It therefore pays to learn about this diverse group of actors and what motivates them.
Although the name might imply otherwise, institutional investors are not individuals but rather nonbank organizations that buy and sell securities on behalf of their members. They trade securities in large enough quantities to qualify for preferential treatment and lower commissions, which makes them the primary point of contact for individuals looking to invest in the market.
In general, there are six types of institutional investors: