In stocks, there are many different terms which mean something specific and today’s piece of jargon is someone or a company that is referred to as a whale. It does have the physical and literal meaning of something big and strong and quite powerful in its environment.
This is the same when talking about a big whale in stocks, because they carry a lot of influence on what happens in the market because of how they have built up their reputation.
To find out more all about the big whales in stocks and what they are able to do keep reading here below, and we will be going through everything on the topic. Do you know what a whale is in stocks?
What Are These Whales?
These large companies or individuals have been referred to commonly as manipulators of the market meaning they can bend it to suit the ebay outcome for them and create a negative outcome for others.
When a whale invests in stock the price will most likely follow the pattern and will skyrocket in most cases. Then other investors will see this happening and want to jump on the success train.
However, what they tend to realize is that by all of these investors all piling in at the same time the rush will eventually start to slow and people will start to remove their investments to avoid a crash.
The whole point of working around these whales is knowing their patterns to invest (see also ‘What Is A Greenfield Investment?‘). If you know that, then you can work around them and make more of a profit. The closer you get to investing after the whale, the more money you can make.
This also links to working around the whale and knowing the best stock to pick to be in line with them. So what are some of the strategies to use them to your advantage?
- Going Into The Unknown – When talking about whales, they have a lot of power and they only want to add to their size whenever and wherever possible. Therefore, they prefer to work behind the scenes and under the radar. You need to look out for stock that they can just take because they have the resources to research and analyze the companies which have really good futures ahead. This comes down to the importance of analyzing because it will always lead you to your pot of gold. They want to take these opportunities only for themselves and make sure they do it without others finding out immediately.
- They Buy Not Sell – They basically have to buy to compete with other companies but they also don’t have to sell anything. This is where they will have long term visions for these companies and plenty of cash flow.
- Follow The Money – This is something that most people learn in business because the earnings matter.
- The SEC – When you follow the data trail form the SEC it is actually something that can be used. They have files sent to them every month to make sure that everything is being done by the books. Therefore, if you have an automated screen that can filter out unnecessary information, you will be able to see what the whales have been doing, when and why.
What Are The Effects Of Whale Trading?
Most of these traders have a feeling of invisibility when it comes to the stocks because they have some much influence and power over the outcomes.
They also have a lot of resources to make sure that they have a well executed plan and would never go in without research and the knowledge of where these companies will go.
There are many people who get a big win and it is most likely down to luck. This is where they need to step back and evaluate why they got this win, was it down to luck or was it through your research and knowledge about the company because it will not be luckl every time.
You are more likely to have success if you analyze everything you can abou that company because you will know what is down the road.
Is It Possible For Anyone To Become A Whale?
It is most likely not possible for every single person to have the chance and opportunity to do this type of work because it is not for everyone. But it is very possible for many people to become successful in this and become a big whale.
You have to know the market which takes experience and you will also have to have a good mentality for trading. You’re not the type of person that goes head first into investments without research and analysis of the company.
You need to know what stocks are good and will carry on being good for a long time and what is there for a short stay. They also like to stay under the radar because this works best for them investing in companies that nobody has noticed yet.
Frequently Asked Questions
This is where the earnings growth is to be found. And it’s also where the undiscovered opportunities often lie.
But as the whales seek to accumulate 500,000, 1 million shares, or sometimes much more, they have to do it slowly over time so they don’t attract attention.
Overall, many people who work in trading know that there are always going to be the big powerful whales in the industry who have major control and influence over the stocks.
But this could be something that you use to your advantage because when they make their move you need to be right there with them. If you are able to find a pattern of a whale and jump on that then you will have much more success.