Market capitalization is determined by different categories
. Large, medium, and small caps are the primary ones. People have recently begun to add 'micro' and 'nano' caps to this category. Corporations are traditionally divided into large, mid, and small cap categories.
Market cap which determines the stock value of companies fluctuates due to varied reasons. Time along with inflation, population change and overall market valuation is one of the determining factors. For example $1 billion was a very large market cap in the 1950s but it is
not so now. The value of market cap is different in different countries.
Large cap market values are anything between $10 billion to $200 billion. Mid caps range from $1 billion to $10 billion. Small caps are values between $300 million to $1 billion. There is no official tab to the market values and no general agreement either; different numbers are used by different indexes. Investors willing to put in large sums of money till now have always preferred large caps because the companies providing SMALL CAP SECURITIES do not have the brand stature attached and remain relatively unknown. Knowledge and opinion about these small firms play a crucial role in investors' interest in
them. Small, unknown brands were not considered an option because they did not have the advertising and presence in the market as much as the 'big brands'. But nowadays small cap stocks too have started to figure as a choice because people have realized that they have significant upside potential.
A stock may be called a 'HOT SMALL CAP STOCK' when it gives massive profits to the buyer who purchased it at a low face value. These stocks rise very quickly, sometimes even into thousands of percentage points making them extremely volatile. But experienced traders are wary of not investing huge fortunes into such stocks lest they lose huge sums of money. It's all about knowing when to get in and when to get out. Buying when no one is buying and selling the stocks off when the buyer frenzy increases is a wise tactic many traders employ. Information about ever changing market prices comes to us everyday in the form of newspaper reports. A tool active investors us to keep in sync with prices and other market fluctuations.
The buyer-seller relation strengthens as more and more investors join in. Once people have had enough practises, come across some mild jitters in their trading, they tend to develop the required skills to understand how everything works. Luck is of course an important factor