Smart money, Pro's and institutions.....

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Old Feb 27, 2007, 11:10pm   #1
 
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Smart money, Pro's and institutions.....

Hello all,

Could someone clarify this for me (ref equity markets);

The terms "Smart money", "Pro's" and "institutions" are often used when describing the forces that really move the markets. Could someone explain the pecking order of the market movers, from "top to bottom"? From there, I'd be interested to find typical returns that are delivered by these categories.

I'm probably confused, but so often I read about smart money and institutions in the same breath, yet when you study the returns of the average unit / investment trust or hedge fund, they're hardly inspiring.

Thanks in advance for any clarification,
UTB
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Last edited by the blades; Feb 27, 2007 at 11:25pm.
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Old Mar 18, 2007, 8:19am   #2
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[QUOTE= when you study the returns of the average unit / investment trust or hedge fund, they're hardly inspiring.UTB[/QUOTE]

hey blades, those institutions above cant be the smart money then, because you got the
figures right there...........probably nobody knows who the smart money is and its just a vague term used by the press
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Old Mar 18, 2007, 10:52am   #3
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Indeed. I would dearly love to know who is doing what to whom in stock index futures, but it is unfortunately not publicly available information. It sounds good as a bit of prose in chart commentaries, but as a useful paradigm I find it unconvincing.

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Originally Posted by the blades
Hello all,

Could someone clarify this for me (ref equity markets);

The terms "Smart money", "Pro's" and "institutions" are often used when describing the forces that really move the markets. Could someone explain the pecking order of the market movers, from "top to bottom"? From there, I'd be interested to find typical returns that are delivered by these categories.

I'm probably confused, but so often I read about smart money and institutions in the same breath, yet when you study the returns of the average unit / investment trust or hedge fund, they're hardly inspiring.

Thanks in advance for any clarification,
UTB
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Old Mar 19, 2007, 3:32pm   #4
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They are all used to describe the same thing. The smart money is not alwasy right but it is better connected than the average gambler.
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Old Mar 19, 2007, 5:24pm   #5
 
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Imo, "Smart Money" refers to those people who are out before the "Stupid Money"
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Old Mar 19, 2007, 5:48pm   #6
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Smart money usually refers to the institutions or big playrers with the implication they are usually right.

However, the question arises as to whether there is sufficient 'amateur' liquidity to take the opposite sides of their trades. Last week in the Euro Stoxx future, four consecutive buys at (if I remeber correctly) sizes 2000, 4000, 7000, 5000 went through at market.

So who took the opposite side? Perhaps there were 18,000 small lots on the bid. I would guess it was other institutions. But were these opening or closing trades? If the former, both sides can't be right. If the latter, again both sides can't be right. But if one was opening, the other closing, theoretically they could both be right.

Maybe someone could suggest another take on this.

Grant.

Last edited by grantx; Mar 19, 2007 at 5:53pm.
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Old Mar 19, 2007, 10:54pm   #7
 
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Quote:
Originally Posted by grantx
Smart money usually refers to the institutions or big playrers with the implication they are usually right.

However, the question arises as to whether there is sufficient 'amateur' liquidity to take the opposite sides of their trades. Last week in the Euro Stoxx future, four consecutive buys at (if I remeber correctly) sizes 2000, 4000, 7000, 5000 went through at market.

So who took the opposite side? Perhaps there were 18,000 small lots on the bid. I would guess it was other institutions. But were these opening or closing trades? If the former, both sides can't be right. If the latter, again both sides can't be right. But if one was opening, the other closing, theoretically they could both be right.

Maybe someone could suggest another take on this.

Grant.
Thanks for the responses chaps.

Grant -

"Smart money usually refers to the institutions or big players with the implication they are usually right" ........how is this best illustrated in terms of results - are there a range of funds that can be seen that reflect this "smart" status?

It certainly can't be unit / investment trusts, and the average hedge fund return (that I see) aren't inspiring either(? )

Any thoughts?

Cheers,
UTB
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