Institutional traders and retail traders are two types of market participants with different characteristics, goals, and strategies.
Institutional traders are professionals who work for financial institutions such as hedge funds, investment banks, or pension funds. They usually trade large volumes of securities and have access to sophisticated trading tools, advanced analytics, and research. Institutional traders often have a long-term investment horizon and aim to generate consistent returns for their clients or institutions.
On the other hand, retail traders are individual traders who trade securities using their own funds. They usually have limited resources and access to less advanced trading tools and research. Retail traders often have a short-term investment horizon and aim to generate profits from price movements in the market.
There are several key differences between institutional and retail traders, including their trading volume, access to market data, research and analytics, and their trading strategies. Institutional traders have the advantage of trading large volumes of securities, which can help them achieve economies of scale and execute trades at more favorable prices. They also have access to a wide range of research and analytics tools, including market intelligence and institutional research reports.
Retail traders, on the other hand, may have limited access to market data and research, but they can often take advantage of the flexibility of their trading strategies. They can use a variety of trading techniques, such as technical analysis, to identify opportunities for profit in the market.
Overall, institutional traders and retail traders have different goals and approaches to trading, and understanding these differences is essential for anyone looking to trade securities in the financial markets.