Capitalization Definition – What is Market Cap? | CFI LB

market capitalisation

Market capitalization, also known as market cap, is the total value of a publicly traded company's stock. market capitalisation is one of the most accurate ways to measure a company's size within the stock market. before buying a company stock you should find out everything you can about that company to gain an understanding of what can be expected for the future of that company. market capitalisation is also important because it is an indication of what investors are willing to pay for its stock.

 

When creating your trading strategy, it is usually recommended that you include a mix of companies with varying ‘market caps’ to keep your stock portfolio well balanced.

 

  • Large-cap companies are usually valued at $10 billion or more, are well established and have a history of steady growth
  • Mid-cap companies are between $2 billion and $10 billion in market value that are expected to continue to experience steady growth
  • Small-cap companies are usually valued between $300 million and $2 billion and a often younger companies that focus on a niche market. small-cap companies are generally considered the riskiest to invest in

 

Example of market capitalisation

 

The way one calculates a company’s market capitalisation is to take the number of shares of stock the company has issued and multiply it by the current market price of the stock. for example, if a company has issued 1 million outstanding shares with each share holding the value of $10, then the company's total market capitalization is $20 million.

 

key takeaways

  • Market capitalization is the total value of a publicly traded company's stock on the stock market
  • It’s important to understand the different between large-cap, mid-cap and small-cap companies
  • Include a mix of companies with varying ‘market caps’ to keep your stock portfolio well balanced.
CFI Financial Group is an award winning global financial markets provider with over 23 years of experience and regulated entities in several jurisdictions, focused on offering impeccable execution and trading conditions including very low spreads, professional services, dedicated support and powerful tools.
CFI Financial Group has regulated subsidiaries in
London • Larnaca • Beirut • Amman • Dubai • Port Louis
Credit Financier Invest - CFI LEBANON
BDL no. 40
1019238,
Ellipse Center 3rd floor, Charles
Malek Avenue, Achrafieh

CFI provides execution-only services and does not provide any investment advice. To make an investment decision, you cannot rely on the content of this website, or on any information, opinion, report or other materials (“Information”) you receive from CFI, or its representatives. Such Information is general and does not consider your objectives and your financial situation, thus they shall not be considered in any way as an express or implied promise nor a guarantee of any profit or limit of loss. CFI shall not bear any liability in case you used or relied on such Information. Please ensure that you make your own research and seek independent advice if necessary.

Forex and CFDs are leveraged products that incur a high level of risk. A small adverse market movement may expose the client to lose the entire invested capital. The majority of retail client accounts lose money when trading in CFDs. Please be aware of trading risks and that you could sustain a loss exceeding your deposited funds, even if a stop loss is used.

CFI Lebanon is regulated by the Banque du Liban and the Capital Markets Authority

niss
forme
The Best Online Financial Trading Services, Middle East, 2020
Entrepreneur Magazine

Please publish modules in offcanvas position.