Who's at the Table?
Retail vs. institutional investors and market makers
When you tap Buy on a stock, you are not trading against the company that issued the stock. You are trading against whoever is on the other side of that order at that millisecond — most likely a market-making algorithm at Citadel Securities, sometimes a quantitative hedge fund unwinding a position, occasionally another retail investor in Ohio. The structure of the market is dominated by handfuls of trillion-dollar firms with armies of PhDs.
The good news, which is rarely advertised, is that you have structural advantages those firms would pay millions to acquire — and the most valuable of them is one most beginners give away for free. Roughly 80% of U.S.
equity trading volume comes from institutional investors, plus the high-frequency-trading and market-making firms that connect them. The remaining 20% — sometimes higher, especially in mega-cap names — is retail flow: individual investors trading through brokerage apps.
That is the opening. Finishing a lesson is where it stops being interesting and starts being useful: the full lesson runs to 7 sections and ends with 4 practice questions. A free account is what opens the rest, and the other 255 lessons in the Academy with it. No card.
What this lesson covers
- 1Institutional investors — bigger but constrained
- 2What you actually have that they don't
- 3The institutional cost stack — why most active funds underperform
- 4Who moves the market — share of daily trading volume (approx.)
- 5BlackRock — the trillion-dollar weight on every quote you see
- 6Where to see this on the platform
- 7Summary