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What Is Market Capitalization?

NEW YORK (TheStreet) -- Some words and concepts in finance are simple and easy enough to guess their meanings: diversification, mutual fund, risk management, price/earnings ratio.

Other financial terms always seem to throw me for a loop. Even though I understand them, I find myself secretly looking up these terms over and over again just to smash the concept into my head.

Thanks @Investopedia, @Nasdaq and @Stox for always being there for my financial definitional needs.

One of those evasive concepts is "market capitalization." I hear the term all the time and I look up a company's market capitalization for every stock I trade, so you know I know what it is. I use the computation and the concept of what market cap means in my stock selection and analysis, but when I try to define it I feel compelled to look it up again.

What is Market Capitalization?

Market Capitalization is the current market value of all of the shares of stock that are outstanding for a publicly traded company.


Not long ago, people spoke of large-cap, mid-cap, and small-cap stocks. I blinked and somewhere along the way we went from these three categories to the six  -- mega, large, mid, small, micro, and nano -- shown below.



These capitalization designations come from www.nasdaq.com.

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