Section 1 · Stock Fundamentals
Market Cap: Small, Mid & Large
Market cap tells you the size of a company — and changes how it trades.
Pond, lake, or ocean?
Market cap is the total value of all a company's shares. A $1 stock with 1 billion shares = $1B market cap. Size matters: large-cap stocks (ocean) move slowly and steadily. Small-cap stocks (pond) can double or crash in a day. Momentum traders love small caps — they move fast.
3 things to know
Small cap: under $2B. Mid cap: $2B–$10B. Large cap: over $10B.
The biggest momentum movers are usually small-cap stocks with low float.
Apple's market cap has exceeded $3 trillion — larger than most countries' GDP.
Dive Deeper
Key vocabulary — tap each card
Practice
Small cap vs large cap for momentum trading
✅ Pros
- Massive % gains possible in a single session
- Less institutional coverage = more inefficiency to exploit
- Catalyst-driven moves are sharper and faster
- Lower price per share = more shares for same dollar risk
❌ Cons
- Wide spreads = higher cost to enter and exit
- Thin liquidity = slippage on large share sizes
- Can crash as fast as it rises — risk is high
- Harder to find reliable data and analyst coverage
Did you know?
A stock's price per share tells you almost nothing about its size. A $5 stock can be worth more than a $500 stock if it has more shares outstanding.