Institutional Option Trading Part -3

Institutional Investment Process

Setting Objectives: Determining risk tolerance, return targets, and time horizons.

Asset Allocation: Dividing the portfolio among different asset classes.

Security Selection: Choosing individual investments.

Portfolio Monitoring: Continuously reviewing performance and risk.

Institutional Trading

Institutional trading refers to the buying and selling of securities in large volumes by institutions.

Types of Institutional Traders

Proprietary Traders: Trade with the institution's own money.

Agency Traders: Execute trades on behalf of clients.

Program Traders: Use algorithms to trade baskets of stocks.

Trading Venues

Exchanges: NYSE, NASDAQ, etc.

Dark Pools: Private exchanges for large orders.

Over-the-Counter (OTC): Direct trading without an exchange.