>>What is the best way to interpret the following info provided by Thomson Inst.? Does this info provide any valid help in determining entry and exit targets? Can the messages simply be manipulations for MM's to hit a price?<<
Read the help!
The arrows shows actual buys/sells.. The Intrest messages are sometimes real and sometimes not.
And its not really a daytrading tool since they can fool you easily.. But it will show what the funds and offshore accounts are upto.
thomsoninvest.net
What is I-Watch?
I-Watch is a tool designed to help you understand the trading patterns of institutional investors by creating a window into pre- and post trade discussions among traders working for large institutions. I-Watch receives this information from AutEx, the world's leading private network for institutional brokers. More than 95% of the largest institutions use AutEx to express interest in and report trades for large blocks of stock. The AutEx data, combined with commentary from our experienced team of analysts allows you to gain a complete picture of the intra-day trading patterns of institutional investors.
How does it work?
Imagine yourself on the floor of the exchange, watching traders shouting their orders into the desk, then writing up their orders after they get a successful trade. A trader will send out an Interest message over AutEx to let others know that they want to trade a stock or they will send a Super message which is analogous to a shouted bid or offer in a trading pit. Trades are then reported to the AutEx network to allow participants to differentiate between those who are serious about trading, versus those that are indicating interest but not actually completing the trades.
How do I use it?
I-Watch is designed to allow you to move through the different levels of institutional trading activity, from the Industry level down to an individual security. At each level we have provided you with a "Help" link that explains how to navigate through that specific level and how to move on to the next.
Who are institutional investors?
Institutional investors are generally considered to be professional investment firms with more than $50 million in assets under management. This includes certain banks, insurance companies, investment advisers, investment companies, mutual fund companies, foundations and pension funds. Institutional investors have staggering amounts of capital under their control which allows them, as a group, to dictate the direction and the pace of the capital markets.
Due to the large volume of shares involved, institutional trading can significantly affect the price movement of a stock. If traders believe that selling is stemming from a large institutional investor, they will react differently than if they believe the selling is coming from a small institution or retail selling. I-Watch commentary often indicates the size of the institutions participating in trading so retail investors can anticipate market reactions.
What are the different types of Institutional Investment Styles?
There are six types of Institutional Investment Styles: Momentum, Aggressive Growth, Growth, Value, and Income. The investment approach of an institution can effect the price movement of a stock. Buying which emanates from a momentum type investor will prompt a different reaction from traders than buying from a value-oriented investor. I-Watch commentary often identifies the types of institutions participating in trading so retail investors can anticipate the market's reactions.
Momentum Investors: Momentum investors are high-turnover investors who focus on buying companies with fast growing earnings and prices. These institutions are renown for establishing multi-million share positions over the course of a few days and liquidating their positions just as quickly, without regard to the effect on the share price. Momentum investors seek out stocks likely to outperform their sector and sell at the first hint of an earnings disappointment or price slowdown.
Aggressive Growth Investors: These types of institutions seek maximum capital gains; current income is not a consideration. Fund/portfolio managers may use several strategies, such as buying high-technology stocks, emerging growth stocks, or companies that have fallen on hard times or are out of favor. These investors typically exhibit more volatile trading patterns and higher turnover rates.
Growth Investors: The primary aim of this category of institutional investors is to achieve capital gains, with little concern for income. Growth-oriented institutions typically seek above average growth of earnings, cash flow, and/or sales. These institutions often purchase a stock on its way up and sell if the stock's near-term outlook is revised negatively. In general, these investors buy stock in more seasoned companies compared to aggressive growth investors and therefore, typically take on less risk.
GARP Investors: Investors utilizing a Growth-At-a-Reasonable-Price (GARP) strategy focus on relative Price/Earnings ratios and other key valuation statistics. Many GARP investors rely on the traditional Graham-Dodd method of valuation. The focus of this type of investing is on finding stocks with strong fundamentals and low valuations.
Value Investors: Value-oriented institutions seek investment in companies with undervalued assets in hopes that those assets will appreciate to their true market value. These investors often focus on companies selling at low price/earnings ratios and tend to place a lesser emphasis on near-term earnings growth. While value-oriented investors tend to have longer investment horizons, they are also more likely to book profits in a stock based on increased valuation rather than on a change in the company's fundamentals.
Income Investors: Institutions who focus on income investing seek to provide a high level of current income by buying government and corporate bonds as well as high-yielding common and preferred stocks. Income funds are not designed to provide major capital gains, but their shares do rise when interest rates fall.
Where does I-Watch obtain its data?
I-Watch receives information from the AutEx network, the world's leading private network for institutional brokers. More than 95% of the largest institutions use AutEx to express interest in and report trades for large blocks of stock. The AutEx data, combined with commentary from our experienced team of analysts allows you to gain a complete picture of the intra-day trading patterns of institutional investors.
Who are the different types of market participants?
There are four types of market participants:
Institutional Investors - An institution is generally considered to be a professional investment firm with more than $50 million in assets under management. This includes certain banks, insurance companies, investment advisers, investment companies, mutual fund companies, foundations and pension funds. Institutional investors have staggering amounts of capital under their control which allows them, as a group, to dictate the direction and the pace of the capital markets.
Day-Traders - Day Traders purchase and sell securities (or vice-versa) within the same day, often within minutes or seconds. Day traders are NOT investors, they are short-term traders who like to close out all positions by the session's end. These market participants profit by taking advantage of intra-day price fluctuations. The increasing accessibility of on-line trading has accelerated the rate of growth of day trading.
Retail Investors - Retail Investors, or individual investors, include high net worth investors, as well as the "moms and pops." These are non-professional investors managing assets on their own behalf. While individually these investors have relatively small amounts of wealth, as a cumulative group, retail investors account for a significant portion of the market's capital. However, since retail investors have historically made investment decisions irrespective of each other, this group rarely determines the direction of the broader markets.
Brokerage Firms - Brokerage Firms are financial companies which specialize in creating, trading, and selling securities. The investment banking unit of brokerage firms create securities by underwriting the initial public offering for companies. The trading department buys and sells securities on behalf of the firm's clients. Typically, firm's have an institutional trading desk to handle the orders that come from the institutions and a retail trading desk to service individual investors. The trading department also tries to make a profit by trading securities on behalf of the firm's own house accounts which is called "making a market". The syndicate department of a brokerage firm is in charge of advising clients on trading decisions, as well as soliciting trading business. Similar to the trading department, the syndicate department is split into an institutional sales force and a retail sales force.
What is a block trade?
A transaction greater than 10,000 shares is considered a block trade. Block trades are generally executed on behalf of institutional investors rather than day traders or retail investors. I-Watch monitors block trades to identify unusual amounts of activity which may warrant further investigation.
What is the difference between an Industry and a Sector?
A Sector is a subset of an Industry. A company is classified into an industry and a sector based on the business segment where the majority of revenues are generated as reported by the company in its annual report.
What is Price Momentum?
The Pricing Momentum indicator is often used to compare price performance of individual stocks as well as to identify stocks that are deviating from their normal pricing trend. It is an approximation of the annual rate of change in price. An index of 100 indicates no change, an index of 130 indicates that the stock's price is increasing at an annualized rate of about 30 percent. An index of 70 indicates that the stock price is decreasing at an annualized rate of 30 percent.
How do I see detailed trading activity after the market opens?
The I-Watch charts are displayed in 20 minute time intervals. To see detailed trading activity when the market opens, change the time interval by selecting the "5 Min" radio button.
What does the "Low Coverage" message indicate underneath the "Total Trade Volume" pie chart?
A "Low Coverage" message appears if the current volume of reported trades as a percentage of total trading is insignificant due to low reporting volume by brokers.
Who should I contact if I have a question that isn't answered here?
You may contact our customer service department at ThomsonRTQ@thomsoninvest.net. |
