Market capitalisation (or just market cap) is the total market value of a company’s outstanding shares. This is a good estimator of the size of a company.
- Small-cap is \lt \2 \text{ billion}$
- Mid-cap is \geq \2 \text{ billion}$
- Large-cap is \geq \10 \text{ billion}$
Generally:
- The greater the market capitalisation, the less risky an investment is.
- The lesser the market capitalisation, the lower the trading volume and the less liquid an investment is (since there are fewer buyers and sellers).