Editing Market capitalization (section)

== Market cap terms ==
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Traditionally, companies were divided into large-cap, mid-cap, and [[Small cap company|small-cap]].<ref>{{Cite web |title=Large Cap, Mid Cap, and Small Cap Stocks |url=https://www.fe.training/free-resources/asset-management/large-cap-mid-cap-and-small-cap-stocks/ |access-date=February 25, 2025 |date=July 2, 2021 |website=Financial Edge |first=Victoria |last=Collin |language=en-US}}</ref><ref name="investmcd" /> The terms [[mega-cap]] and [[microcap stock|micro-cap]] have since come into common use,<ref>{{cite web|title=Mega Cap: Companies With Market Caps Above $200 Billion|url=http://www.investopedia.com/terms/m/megacap.asp |website=Investopedia |access-date=February 25, 2025|first=James |last=Chen |date=April 27, 2022}}</ref><ref>{{cite web|title=Micro-Cap: Definition in Stock Investing, Risks Vs. Larger Caps|url=http://www.investopedia.com/terms/m/microcapstock.asp|access-date=February 25, 2025 |website=Investopedia |first=James |last=Chen |date=July 12, 2022}}</ref> and [[nano-cap]] is sometimes heard. Large caps have a slow growth rate as compared to small caps.<ref name=":1" /> Different numbers are used by different indexes;<ref>{{Cite web |url=http://www.investorwords.com/2969/market_capitalization.html |title=What is Market Capitalization? definition and meaning |date=2020 |website=InvestorWords |publisher=WebFinance, Inc. |access-date=August 3, 2008 |archive-date=October 1, 2020 |archive-url=https://web.archive.org/web/20201001211843/http://www.investorwords.com/2969/market_capitalization.html |url-status=dead }}</ref> there is no official definition of, or full consensus agreement about, the exact cutoff values. The cutoffs may be defined as percentiles rather than in [[real versus nominal value (economics)|nominal dollars]]. The definitions expressed in nominal dollars need to be adjusted over decades due to [[inflation]], [[population]] change, and overall market valuation (for example, $1 billion was a large market cap in 1950, but it is not very large now), and market caps are likely to be different country to country.

===In the United States===

[[FINRA]]'s investor education materials state that the following is a typical (not official) categorization of stocks by market capitalization:<ref name="finra-mktcap"/>

{| class="wikitable"
|+ Market cap categories per [[FINRA]]<ref name="finra-mktcap">{{Cite web|url=https://www.finra.org/investors/insights/market-cap|title=Market Cap Explained|website=[[FINRA]]|date=30 September 2022 |access-date=2025-02-25 |archive-url=https://web.archive.org/web/20250204011704/https://www.finra.org/investors/insights/market-cap |archive-date=2025-02-04 |url-status=live}}</ref>
!rowspan=2|Category
!colspan=2|Market capitalization of individual stock<br>(US$ billions)
|-
!(FINRA, 2022)
!([[GDP deflator]] adjusted to {{Inflation/year|US-GDP}} [[US$]]){{Inflation/fn|US-GDP}}
|-
| [[Mega-cap]] || ≥ $200 || ≥ ${{Inflation|US-GDP|200|2022|fmt=c}}
|-
| Large-cap || $10{{snd}}$200 || ${{Inflation|US-GDP|10|2022|fmt=c}}{{snd}}${{Inflation|US-GDP|200|2022|fmt=c}}  
|-
| Mid-cap || $2{{snd}}$10 || ${{Inflation|US-GDP|2|2022|fmt=c}}{{snd}}${{Inflation|US-GDP|10|2022|fmt=c}}
|-
| [[Small-cap]] || $0.25{{snd}}$2 || ${{Inflation|US-GDP|0.25|2022|r=2|fmt=c}}{{snd}}${{Inflation|US-GDP|2|2022|fmt=c}}
|-
| [[Microcap stock|Micro-cap]]  || < $0.25|| < ${{Inflation|US-GDP|0.25|2022|r=2}}
|}

The [[U.S. Securities and Exchange Commission]] notes that ''[[nano-cap]]'' stocks, in cases when they're separated from micro-caps, are typically defined as stocks with a market capitalization less than $50&nbsp;million (as of 2013);<ref name="sec-micro-guide">{{cite web|url=https://www.sec.gov/investor/pubs/microcapstock.htm|title=Microcap Stock: A Guide for Investors|website=[[U.S. Securities and Exchange Commission]] |date=September 18, 2013 |access-date=2025-02-25 |archiveurl=https://archive.today/20250226065424/https://www.sec.gov/about/reports-publications/investorpubsmicrocapstock |archivedate=2025-02-26 |url-status=live}}</ref> which is equivalent to less than ${{Inflation|US-GDP|50|2013|fmt=c}} million in {{Inflation/year|US-GDP}}.{{Inflation/fn|US-GDP}}

[[S&P Dow Jones Indices]] defines 3 major US indices segmented by market capitalization. The components of these indices are selected by committee, but in order to be eligible, among other requirements,<ref name="sp-methodology">{{cite web | url=https://www.spglobal.com/spdji/en/documents/methodologies/methodology-sp-us-indices.pdf | title=S&P U.S. Indices Methodology |publisher=[[S&P Dow Jones Indices]]|date=February 20, 2025|access-date=February 27, 2025}}</ref> a stock's market capitalization at the time of addition must be within the respective range in the following table:

{| class="wikitable"
|+ Market cap requirements for major S&P indices, as of 2025<ref name="sp2025-01-02">{{cite web |url = https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20250102-1476019/1476019_2025janmktcapguidelines.pdf |title= S&P Dow Jones Indices Announces Update to S&P Composite 1500 Market Cap Guidelines |date = January 2, 2025 |website=[[S&P Dow Jones Indices]] |access-date = January 7, 2025}}</ref>
|-
! Index !! Category !! Market capitalization required for addition
|- 
| [[S&P 500]] || Large-cap || ≥ US$20.5&nbsp;billion
|- 
| [[S&P 400]] || Mid-cap || $7.4&nbsp;billion{{snd}}$20.5&nbsp;billion
|- 
| [[S&P 600]] || [[Small-cap]] || $1&nbsp;billion{{snd}}$7.4&nbsp;billion
|}

These market cap eligibility criteria are only for addition to these indices, not for continued membership in an index. As a result, an S&P index constituent that appears to violate criteria for addition to that index is not removed unless ongoing conditions warrant an index change.<ref name="sp2025-01-02"/>