Market cap meaning：Market Cap Explained

If you’re researching stocks or stock funds, youll often see companies categorized by market capitalization. But what is this, and why does it matter?

Market capitalization, or market cap, is one measurement of a companys size. It’s the total value of a companys outstanding shares of stock, which include publicly traded shares plus restricted shares held by company officers and insiders.

To calculate market cap, you take the total number of a companys shares outstanding and multiply that figure by the companys current stock price. For example, if a company has 5 million shares outstanding and its current stock price is $20, it has a market capitalization of $100 million.

You may hear companies described as large-cap, mid-cap or small-cap—or even mega-cap or micro-cap. The delineation between each group can vary, but generally, youll see them broken down like this:

mega-cap: market value of $200 billion or more; large-cap: market value between $10 billio...