Kenny Tran to Learn & to Share

Outstanding Shares

The total number of shares that a corporation has issued is called its outstanding shares. You can look for the number of outstanding shares on the Internet - for example, at Yahoo! Finance. The bigger a corporation becomes, the more outstanding shares there are. Because the stock market goes up and down based on supply and demand, a corporation doesn’t want to issue too many shares unless it is pretty sure that people will scoop them up.

Float

Among the outstanding shares, shares owned by outside investors like us are called the float. If a corporation has a total of 10 million outstanding shares. Of those 10 million shares, corporate insiders hold 4 million. Thus, the float is 6 million shares. Very simple right? These are the shares that are traded every day on the stock exchange by investors and traders.

Note: To me, outstanding shares and float may be important because the market is all about supply and demand. If you know how many shares are outstanding and what the float is, you can calculate whether there is too little supply and too much demand (the stock will go up in price) or too much supply and not enough
demand (the stock price will go down).

Market Capitalization

Another way to classify stocks is by size. The market capitalization (market cap) of a stock tells you how large the corporation is. You can look for the market cap of a corporate on the Internet - for example, at Yahoo! Finance. Large-cap corporations are those with more than $5 billion of market cap. Mid-cap corporations are those with between $1 and $5 billion market cap. Small-cap corporations are those with between $250 million to $1 billion market cap. Finally, mirco-cap corporations are those with less than $250 million of market cap.

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