Glossary of Terms

Search common forex trading terms and definitions from A to Z.

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Below is a glossary of terms that are used in the online trading industry. Select the first letter of the word you are seeking from the list above to jump to the appropriate section of the glossary.

Market Capitalization

What is market capitalization?

Market capitalization is the monetary amount that a publicly traded company is worth, as determined by the value of the company’s outstanding shares. The market capitalization is calculated by the value of one company share times the number of outstanding shares (shares held by stockholders). For example, a company that has 3 million outstanding shares that are valued at $45 per share, will have a market capitalization of $105 million dollars.

How does market capitalization affect forex traders?

Company rankingMarket capitalizationRisk vs. Potential returns
Large capitalization companies$10 billion or moreLower risk, lower potential returns
Mid-capitalization companies$2 billion – $10 billionModerate risk, moderate potential returns
Small capitalization companies$300 million – $2 billionHigher risk, higher potential returns