Market Capitalisation
Market capitalisation (or "market cap") is the total dollar value of a company's outstanding shares: share count × current share price.
Common tiers
- Mega-cap: $200B+ — Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta. The market's largest names; dominate S&P 500 index weight
- Large-cap: $10B - $200B — the broad S&P 500
- Mid-cap: $2B - $10B — S&P 400 territory, often where institutional ownership transitions
- Small-cap: $300M - $2B — Russell 2000 territory
- Micro-cap: $50M - $300M — limited institutional coverage
- Nano-cap: under $50M — typically over-the-counter, very thin liquidity
Why it matters for trading
- Liquidity: bigger caps trade orders of magnitude more dollar volume daily. A $10M order in AAPL is invisible; the same order in a $100M micro-cap can move the stock 20%
- Volatility: smaller caps have systematically higher realised volatility — empirically, small-cap monthly volatility is 1.5-2x large-cap
- Spread: bid/ask spreads widen dramatically as you move down the cap spectrum; nano-cap spreads can exceed 5% in thin moments
- Squeeze risk: smaller-cap names with high short interest are far more prone to violent short squeezes than mega-caps
Float vs market cap
Public float (or just "float") is the subset of shares actually available for public trading — excluding insider holdings, restricted shares, and treasury stock. For most large-caps, float is 80-95% of market cap. For some founder-controlled names (e.g. PLTR shortly after IPO), float can be much lower, which amplifies price moves on relatively small order flow.
How Top Tier Newswire uses it
The AI Top Trades model considers market cap implicitly through liquidity signals — names with very thin trading volume or extreme price swings on tiny orders get filtered out before reaching the finalist set. The S&P 500 heatmap weights tile size by market cap so the largest holdings visually dominate the screen.