What is Market Cap? Everything You Need to Know

How investors use market cap to estimate risk and reward

Photo by Austin Distel on Unsplash

Market cap is a measure of company size, and a basic metric that investors use to understand a stock’s risk / reward profile.

It’s important to understand what market cap is, how investors use it, and which market caps offer the best returns.

Here’s what we’re going to cover below:

• What is Market Capitalization?
• What Does Market Cap Mean?
• Market Cap Formula & Examples
• How Does Market Cap Change?
• Market Cap Definition & Categories
• Market Cap Ranking & Examples
• Why Is Market Cap Important?
• What Does Market Cap Tell You?
• What Is a Good Market Cap?
• Why Do Small-Cap Stocks Outperform Large-Cap Stocks?
• How to Use Market Capitalization
• Market Capitalization: Key Takeaways

What is Market Capitalization?

Market capitalization is the total market value of all the shares of a publicly traded company. It’s a simple calculation of how a company is currently…