Market Maker

Market Capitalization

The total market value of a company's outstanding shares, calculated by multiplying the current share price by the total number of shares. Used to classify companies as mega-cap (>$200B), large-cap ($10-200B), mid-cap ($2-10B), small-cap ($300M-2B), or micro-cap (<$300M).

Float

The number of shares available for public trading, excluding restricted shares held by insiders, officers, and controlling shareholders. A lower float often means higher volatility because fewer shares are available to absorb buying or selling pressure.

Liquidity

The ease with which an asset can be bought or sold in the market without significantly affecting its price. Higher liquidity means tighter bid-ask spreads, lower transaction costs, and better price discovery. Essential for institutional investors managing large positions.

Sector Classification

A system for grouping companies into sectors and industries based on their primary business activities. The most widely used framework is GICS (Global Industry Classification Standard), which organizes companies into 11 sectors, 25 industry groups, and 74 industries.

Bid-Ask Spread

The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller will accept (ask). A narrower spread typically indicates higher liquidity and lower implicit trading costs for investors.

Dark Pool

A private exchange for trading securities that is not accessible to the general public. Allows institutional investors to execute large block trades without immediately impacting market prices or revealing their trading intentions to other market participants.