Elephants

Loading the player...

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.

BREAKING DOWN '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.

RELATED TERMS
  1. Hunting Elephants

    The practice of targeting large companies or customers.
  2. White Elephant

    Any investment that nobody wants because it will most likely ...
  3. Institutional Ownership

    The amount of a company’s available stock owned by mutual or ...
  4. Dollar Volume Liquidity

    A stock or exchange-traded fund's share price times its average ...
  5. Pooled Funds

    Funds from many individual investors that are aggregated for ...
  6. Taking The Street

    A slang phrase referring to the hedge fund tactic of buying large ...
Related Articles
  1. Investing Basics

    What's an Elephant?

    In the financial world, an elephant is a large institution that influences the markets and prices in big ways whenever it makes high-volume trades.
  2. Forex Education

    Your Mouse And The Elephants

    Investing online is cheaper, safer and easier than ever before. Find out how to choose the broker that will help you get the most for your money.
  3. Investing Basics

    Pooled Funds Minimize Risk and Reward

    Pooled funds combine money from many individuals to invest in vehicles like a mutual fund or a pension fund.
  4. Home & Auto

    Swimming Pools: Costs Vs. Long-Term Value

    Consider the costs of installing and maintaining a swimming pool, and compare this with the pool's utility and the market value it adds to your home.
  5. Mutual Funds & ETFs

    How Mutual Funds Affect Stock Prices

    Find out how mutual fund trading activity -- and that of other institutional investors -- impacts stock prices, including both short and long-term effects.
  6. Mutual Funds & ETFs

    The Pros And Cons Of Institutional Ownership

    These big players can both create and destroy value for shareholders.
  7. Investing

    Should You Wade Into The Dark Pools Of Liquidity?

    Dark pools of liquidity allow big investors to trade away from the public eye. They limit market impact but may leave small investors in the cold.
  8. Investing

    Net Asset Value

    Discover how mutual fund companies and ETFs price shares of their investment pools.
  9. Charts & Patterns

    How To Use Volume To Improve Your Trading

    The basic guidelines to analyzing volume may not apply in all situations, but overall, they can help direct entry and exit decisions.
  10. Options & Futures

    Interpreting Volume For The Futures Market

    Learn how to read the volume reports, look at the relation to liquidity and interpret volume using open interest.
RELATED FAQS
  1. What's the difference between institutional and non-institutional investors?

    There are a number of differences between institutional investors and non-institutional investors. If you are considering ... Read Answer >>
  2. What is the "squawk box scandal"?

    In 2002 and 2003, the day traders at Watley Group seemed to have an uncanny knack at predicting the movements of institutional ... Read Answer >>
  3. Do stocks that trade with a large daily volume generally have less volatility?

    Stock volatility refers to a drastic decrease or increase in value experienced by a given stock within a given period. There ... Read Answer >>
  4. Why is the Uptick Volume important for traders and analysts?

    Find out why technical analysts and traders keep track of uptick volume to better assess the momentum of a stock's price ... Read Answer >>
  5. Why is trading volume important to investors?

    Learn about trading volume, its importance and how investors analyze volume to confirm a trend or reversal in a security. Read Answer >>
  6. What is the Uptick Volume formula and how is it calculated?

    Learn more about uptick volume, a measurement of the number of trades that take place during a time when an asset's price ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center