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
Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
