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Glossary

What is Market cap?

Market cap is the price tag of a whole company on the stock market.

The simple explanation

Market capitalization is the share price multiplied by the number of shares that exist. It tells you how big the market thinks a company is. Companies are often grouped as large cap, mid cap or small cap depending on this number.

An example

If a company has 1 billion shares and each share costs 50 dollars, its market cap is 50 billion dollars.

Why it matters

Market cap is a better way to compare company size than share price. A 20 dollar stock can be a giant and a 500 dollar stock can be tiny.

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Educational information, not financial advice.