A $2 stock feels cheap and a $200 stock feels expensive, but share price alone is meaningless. What matters is what the whole company is valued at: share price multiplied by total shares outstanding. That is market capitalization.
A $2 stock with 500 million shares is a $1 billion company. A $200 stock with 1 million shares is a $200 million company. The "expensive" stock belongs to the smaller business.
Common buckets: mega cap (over $200B), large cap ($10B+), mid cap ($2–10B), small cap ($300M–2B), micro cap (under $300M), and nano cap (under $50M). The boundaries are informal but widely used.
Size is a rough proxy for stability. Large caps have institutional ownership, analyst coverage, and deep liquidity. Micro caps can be moved by a single motivated buyer — or a single press release.
The explosive daily gainers are concentrated in small and micro caps because it takes far less money to move them. That also makes them more volatile, less liquid, and more prone to dilution and manipulation.
Knowing the market cap tells you which game you are playing: a micro-cap runner is a fast, dangerous momentum game; a large-cap breakout is a slower, steadier trend game. Both can work — but they are different sports.
Mostly for mechanics: very low-priced stocks can face exchange delisting rules (often under $1) and some institutions cannot buy them, which affects who is trading.
Formally, a stock trading under $5, often on OTC markets. Many combine small market caps, low liquidity, and high risk — which is why they move so dramatically.
It is what the market currently prices the equity at — not necessarily fair value, and it excludes debt. Enterprise value adds debt and subtracts cash for a fuller picture.
TheScanner watches premarket gappers, unusual volume, whale flow, insider buying, and news catalysts across the whole market — and logs every alert so the track record is verifiable. Research tool, not investment advice.
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