OptionAutomator Options Trading Glossary:

Definition, Examples & Resources:Market Capitalization'

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What is Market Capitalization in Options Trading ?

Market Capitalization
Market Capitalization, also called 'Market Cap' for short, is the total value of outstanding shares for the Underlying.  Market Cap describes the value of the company or the size of an ETF's assets under management.

How to Use in Your Brutus Options Ranker Strategy

Market cap can be added to your Brutus Options Ranker Strategy to indicate a preference for a certain size company or fund (if using an ETF).

You might consider the following targets for Market Cap:

  • Maximize Market Cap - Give preference to the largest companies.  This could work well on directionless, premium selling strategies.
  • Minimize Market Cap - Give preference to smaller companies.  This could work well in trending markets.
  • Target a specific Market Cap - You could set a preferred Market Cap value to target mid-cap companies.

Video on Market Capitalization

Broader Term

  • Capitalization

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