Market capitalization or market cap is the total market value of a stock or company. It represents the investors/traders consensus on the value of a company.
The Market capitalization is calculated by multiplying the number of shares outstanding of a company by its stock market price.
For example, if a company has 20 million shares outstanding and its stock is priced at 50$, then its market capitalization is $1 billion.
There are three categories of market capitalization in the U.S. stock market:
Large cap: Stocks with a market capitalization above $10 billion
Middle cap: Stocks with a market capitalization between $2 billion and 10$ billion
Small cap: Stock with a market capitalization below $2 billion
