A short excerpt from a YouTube video ("When Liquidity Creates Big Moves" by Kosta Ouzas) explaining how speculating institutions operate: they buy from forced sellers and sell to forced buyers, allowing them to "buy low, sell high" and rebalance portfolios by acquiring inventory and moving prices higher. The speaker emphasizes two types of institutional operations that perform different actions but together produce market-wide price movements as the composite of individual operations.
Let's talk about the speculators, the speculating institutions. Speculating institutions, you accumulate low because these, these are forced sellers, and these are forced buyers. So that's perfect. You bought low, you sold high. Now your book is even, you're even. You need more inventory. You wouldn't want to go buy, get more Short side, that would be incorrect. That would imbalance your portfolio. So what do you do? You come right back over here, pick up new inventory, and then you move that inventory higher. So these two types of institutional operations, actually, they're doing two different things, but it syncs up just the same. And the market is the composite of all those operations at one time.
