Course Content
Introduction
The stock market is a marketplace where shares of publicly listed companies are bought and sold. It plays a central role in the modern economy, acting as a bridge between businesses that need capital and investors who have money to invest. The origins of the stock market trace back to the early 1600s, when the Dutch East India Company issued the first shares on the Amsterdam Stock Exchange. This allowed the company to raise money from the public to fund its trade ventures, in return for a share of the profits. Over time, this concept evolved, and today, stock markets exist all over the world, with major exchanges like the New York Stock Exchange (NYSE), NASDAQ, and London Stock Exchange facilitating trillions of dollars in trade. At its core, the stock market enables businesses to grow. By offering shares to the public through a process called an Initial Public Offering (IPO), companies can raise large amounts of money to expand operations, invest in research, or develop new products—without having to rely solely on banks or private lenders. In return, investors get the opportunity to share in the company’s success through rising share prices and dividends. Investing in the stock market can be a powerful way to build wealth over time. Wise investments in strong companies can generate solid returns, especially when held for the long term. Many individuals have grown their savings substantially by investing in companies that have thrived. However, it’s important to remember that the stock market carries risks. Prices can go up, but they can also go down—sometimes sharply. Economic downturns, company mismanagement, or shifts in the global market can all lead to losses. For beginners, it's essential to approach investing with caution, avoid chasing “get rich quick” schemes, and take the time to understand what you're investing in. In short, the stock market is a powerful tool for economic growth and personal financial development—but like all tools, it must be used wisely.
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Introduction
Stock Markets Around The World
Listing On A Stock Market
How Stocks are Bought and Sold
Trade Date vs Settlement Date, What is T + 2?
What Is A Stock Market Index?
ETF’s and Index Funds
Fundamental Analysis
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Fundamental Analysis Introduction
Understanding Revenue and Profit
Earnings Per Share and PE Ratio
Understanding the Balance Sheet
Understanding Cashflow
Dividends – How Investors Earn Income From Their Shares
What Causes Stock Prices To Rise And Fall
Understanding Market Capitalization
Technical Analysis
Along with Fundamental Analysis, Investors increasingly rely on Technical Analysis to decide whether to buy or sell a stock. Here we will explore the main techniques.
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Introduction to Technical Analysis
How To Read A Price Chart – The Basics
Understanding Support and Resistance Levels
Identifying Trends and Drawing Trendlines
Understanding Moving Averages
Introduction to Momentum Indicators
Chart Patterns – Spotting Setups in the Market
Volume – The Power Behind a Price Movement
Investing Safely and Profitably
How do professionals invest safely and profitably? Some key concepts such as position sizing and stop losses.
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How To Place Trades And Manage Risk
Using A Trailing Stop To Protect Profits and Limit Loss
Diversification and Portfolio Management
Taking Profits
Common Investor Mistakes And How To Avoid Them
A Quick Word On Taxes
Summary and Beginner’s Checklist
10 Must Read Books for Investors and Traders
Beginners guide to investing in the Stock Market

Understanding Market Capitalization

 

When people talk about how “big” a company is, they’re usually referring to its market capitalization, or market cap for short.

 

It’s one of the simplest and fastest ways to measure a company’s overall value on the stock market — and it’s used every day by investors, analysts, and financial media.

 

 

What Is Market Capitalization?

 

Market Capitalization = Share Price × Total Number of Shares

 

It’s the total value of all a company’s shares combined, based on the current stock price.

 

Example:
If a company has 100 million shares and each share is worth $10, then:
Market Cap = $10 × 100 million = $1 billion

 

This means the company is valued by the market at $1 billion.

 

 

Why Is Market Cap Important?

 

  • It helps investors quickly compare the size and value of different companies.

  • It gives a sense of how established or risky a company might be.

  • It’s often used to group companies into different categories of investment.

 

 

Market Cap Categories

 

Category Market Cap Range Typical Traits
Large Cap Over $10 billion Established, stable, less volatile (e.g. Apple, Microsoft)
Mid Cap $2 billion – $10 billion Growing, solid companies with some risk and reward
Small Cap $300 million – $2 billion Young, fast-growing companies with more risk
Micro Cap Under $300 million Highly speculative, often illiquid
Mega Cap Over $200 billion Global giants — Apple, Microsoft, Amazon, etc.

 

How Investors Use Market Cap

 

  • It helps you choose investments that match your risk tolerance.

    • Large caps are more stable but may grow slower.

    • Small caps are riskier but can grow faster.

 

  • It’s also used when investing in ETFs or index funds — many funds focus on a specific cap size (e.g. “S&P 500 = large cap”, “Russell 2000 = small cap”).

 

  • Market cap is also used to weight companies in indexes — bigger companies have more influence on index movement.

 

 

Market Cap vs. True Value

 

While market cap tells you how the market values a company, it doesn’t always reflect its true worth (also called “intrinsic value”).

 

That’s why investors use fundamental analysis — to decide whether the stock is:

  • Undervalued (cheap compared to its earnings/assets)

  • Overvalued (expensive for what it delivers)

 

Still, market cap is a very useful starting point.

 

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Stock Market Course