Track Hedge Funds' Trades Using THESE Tools!

Track Hedge Funds' Trades Using THESE Tools! 

In this blog post, you're going to learn how you can directly track and follow any trades that a hedge fund or large institution has made. This information is very beneficial because large institutions have a ton of power and influence over the financial markets and you'll learn how to mimic their trades for free. We have a great post today so make sure to read to the end!

The two main websites that we use for this are Whalewisdom.com and Hedgefollow.com. While both of these websites operate in a similar manner, it is beneficial to use both of them, so you have access to as much information as possible.  



Whale Wisdom
WhaleWisdom allows you to search for basically any stock or hedge fund. If you decide to search for a specific stock, you'll have access to a ton of data like how many funds are holding the stock and who the largest institutional investors are. You can see how many shares each institution owns, how significant the position is, and even the date range they entered the position.

 If you want to follow specific institutional investors or funds, you can do that too. Let's assume you wanted to follow Michael Bury- his hedge fund is Scion Asset Management-. First, type in "Scion Asset Management" in the search bar on WhaleWisdom. From that point, you will see a ton of information like the funds' most significant holdings, recent trades, and even options data.

While analyzing the holdings of institutions on WhaleWisdom, I like to sort the data by "Market Value." The higher the market value of the position being held, the more confident the institution is in the trade. For example, if an institution has a $30,000 stock position and a $400 million stock position, they obviously have a lot more confidence in the stock they have $400 million in.

Another useful tip I have for WhaleWisdom is sorting the holdings by "% Change." This shows us how much the institution is adjusting its current position in the stock. If an institution was holding 100,000 shares of stock ABC last quarter and is now holding 200,000 shares of stock ABC this quarter that would would represent a change of 100%. This shows us that the institution is confident in their position and that they are doubling down. This data can help find which stocks the institutions are most confident in.


Hedge Follow
If you head over to the other website, Hedge Follow, there will be a couple of top investors on the home page like Bill Ackman, Warren Buffett, and David Einhorn. There are multiple investors to choose from. You can click whichever one you want to view and even search for a specific investor using the search tab.

In this example, we'll be looking at Bill Ackman. By clicking on his profile, you will see the Pershing Square Capital Management Holdings Heatmap and can examine the changes in his stock positions and follow along with him. One of the best ways to use this website is to check up on some notable investors like Buffett, Einhorn, and Ackman. Periodically analyzing the moves they're making can be great because you can see how they are positioning themselves for the current market and even emulate their stock positions.
 An important thing to keep in mind is that the filing dates between all of these positions are delayed by a couple of months. The data mainly comes from 13 F forms which are filed quarterly. This basically means that you can follow their trades, but the data will be delayed by a couple of weeks or months.


Example trade
Here's some interesting data I found for GEO stock. I typed in "GEO" on WhaleWisdom and saw that the CEO of GEO stock was buying a lot of shares lately. In addition to the CEO loading up, I noticed that over the past quarter, there was a new position increase of 38 percent. In the prior quarter 29 funds had new positions in GEO, but this quarter there were 40 funds with new positions. I interpreted this as a bullish sign because the CEO was dumping millions into the stock, and multiple funds joined him. People can sell their shares for an unlimited number of reasons. They could think the stock will fall, or they might just want to spend their money elsewhere. But, there's only one reason someone buys a stock, and that's because they think it will rise.

Conclusion
The data from the websites shared in this post are useful for a variety of reasons. You can see what stocks institutions are buying and how many shares they have. While access to this information is great, there are also some downsides. There is a delay between the date the institutions enter their stock position and when the information is made public. Because of this, sometimes the stock price might rise before you even know the institution bought the stock. While this sucks and there isn't a fix for this problem, the opposite also happens. Sometimes an institution loads up on a stock, and the price falls, which would give you an excellent opportunity to enter. In addition to the delayed data, we don't know the exact strike prices and expiration dates on the options positions the institutions take. All in all, the information hosted by these two sites are very useful and definitely worth checking out!