An institutional investor that amasses a lot of purchasing power (i.e., controls a huge amount of money) and as such can inflict a substantial impact on a security‘s market price when buying or selling. Proverbially, when it is said to be jumping in (or getting out of) the pool, an elephant (large investor) would be buying (or selling) a given stock. Moves of elephants are often used by ordinary investors as clues for buying or selling. As a rule of thumb, ordinary investors usually make sure the elephants are purchasing the stock and then follow suit. A clue can be drawn when the stock’s price is climbing into new highs while the volume is 50% or more above the stock’s average volume. It would be too late to buy when a stock has gone up more than 5% from its breakout level.
A small investor is idiomatically referred to as a mouse.
