Elephants
Definition of 'Elephants'Slang for large institutions that have the funds to make high volumes trades. Due to the large volumes of stock that elephants deal in, any investment decisions that they make will have a large influence on the price of the underlying financial asset. |
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Investopedia explains 'Elephants'Think of a swimming pool: if an elephant steps into the pool (buys into a position), the water level (stock price) increases; if the elephant gets out of the pool (sells a position), the water level (stock price) decreases. In comparison to the elephant's influence on stock prices, the effect of an individual investor is more like that of a mouse.Examples of elephants are professionally managed entities like mutual funds, pension plans, banks and insurance companies. Contrarian investors specialize in doing the opposite of the elephants, that is, buying when institutions are selling, and selling when institutions are buying. |
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