Market Capitalization

Market capitalization measures a company's size by equity value, not by its share price. A share priced at $500 is not 'bigger' than one at $50 — what matters is price times the total share count. Market cap is the single most common way to classify companies and to weight most major indexes.

Companies are grouped into broad size tiers (rough, commonly used ranges):

• Large-cap: roughly $10B and up — established, widely followed leaders. The S&P 500 is dominated by these.
• Mid-cap: roughly $2B–$10B — often faster-growing but less proven.
• Small-cap: roughly $300M–$2B — higher growth potential and higher risk and volatility.

Most flagship indexes are cap-weighted: the biggest companies move the index most, which is why a handful of giants can drive a whole index — the reason breadth matters.

Cap size shapes a stock's behavior: large-caps are typically more stable and liquid, small-caps more volatile with more room to grow. It also drives diversification and index construction — and explains how a cap-weighted index can rise while most of its members fall. Knowing a company's cap tells you a lot about its risk profile before you look at anything else.

Entry Point Trading's universe centers on large-cap US equities and major ETFs — the names most investors actually hold — with every signal graded in the open.