Fat fingers, big pockets or Mystical market movers, call them whatever you like. But it is important to understand the large players in Indian market specifically. Most of us already know that smart money is everything although some of you might have no idea about these mystical players! Their origin and tactics, for what purpose they play in the market and main attitude of their investments is boiled down in this short article, Here I will shed some light into the top key players of Indian market.
Why is this important for a small trader like me?
Remember you are playing in the market, where one’s loss is someone else’s profit .In order for you to make money some one has to lose it on the other side. Using this simple statement we can conclude these fat fingers are in the market, they make most of the money by beating rest of the crowd. Crowd in the sense including average to small-scale player like you and me. In order for us to succeed it is essential to understand the one’s who consistently outperform the market.
Big foot Players
Here are the top four categories that make up 80% of Indian market based on volume and transactions
1.Investment Banks: Main players in the industry are investment banks. Whether it is commodities, currencies, derivatives or cash segments without them there would be no market! These guys are from sellside of the trading industry. They actively work as dealers and brokers but also sometimes they make investments on particular assets. Stuffs like IPO’s, Mergers acquisitions is done by these people. An investment bank also aid companies in mergers and acquisitions, and give ancillary services such as market making, trading of derivatives, fixed income instruments, foreign exchange, commodities, and equity securities
Well known names: Barclay’s India, ICICI-securities, Goldman Sachs, DSP Merrill lynch etc.
2.FII’s: Have you ever wondered why Indian stock market is prone to economic fluctuations of US? The Answer is FII’s an acronym for Foreign Institutional Investors. The term used most commonly in India to refer to outside companies investing in the financial markets of India. International institutional investors must register with the Securities and Exchange Board of India to take part in the market. One of the major market regulations of FIIs involves placing limits on FII ownership in Indian companies. They are highly leveraged entities most of them based or linked with United States of America.
Well Known Names: Bridgewater associates, Quantum fund, Berkshire hathway, GPIF etc.
3.Indian Family offices: Income inequality in India will become a clear-cut problem when we consider the number of family offices in India. Family offices are private wealth management advisory firms that serve ultra-high net worth investors. Family offices are different from traditional wealth management shops in that they offer a total outsourced solution to managing the financial and investment side of an affluent individual or family. For example, many family offices offer budgeting, insurance, charitable giving, family owned businesses, wealth transfer and tax services.
Well Known names: Ambani Brothers, Premji Invest, Nathan and co etc
4.Indian Institutional Investors: A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. Institutional investors face protective regulations depending upon the categories.Instituional investors can be both Individual and corporations
Well Known Names: Mutual funds, Commodity advisors, Individual players like Rakesh Jhunjhunwala etc
How to use this information?
Simple! When you hear one of these names or info about these players, pay close attention to it. So when these guys are buying or selling something make sure you are not holding positions against them.
