What is BSE? Bombay Stock Exchange Explained

A Brief History of the BSE: From a Banyan Tree to a Global Exchange

The history of the Bombay Stock Exchange is one of the most fascinating stories in Indian economic history, stretching back to an era when India was still under British colonial rule and the concept of a joint-stock company was just beginning to take root in the subcontinent.

The origins of the BSE can be traced to the 1850s when a small group of stockbrokers would gather under a banyan tree in front of Mumbai's Town Hall to conduct informal share trading. As railways, banks, and cotton mills began to spring up across the Bombay Presidency, the demand for a more organised trading venue grew. By 1875, this loose fraternity of brokers had formalised themselves into the Native Share and Stock Brokers' Association - making it the first organised stock exchange in Asia. The association established rules of conduct, set membership fees, and created the rudiments of a trading system.

The timing was not accidental. The second half of the nineteenth century saw a phenomenal boom in Indian cotton trade, particularly after the American Civil War disrupted global cotton supplies. Bombay's merchants and financiers poured money into new cotton mills and ancillary businesses, and they needed an organised marketplace to raise and trade capital. The fledgling exchange met that need.

Through the twentieth century, the BSE grew steadily, listing more companies, expanding its membership, and deepening its product range. India's independence in 1947 brought new challenges and opportunities. The government's policy of mixed economy meant that public-sector undertakings and private enterprises co-existed, and both needed access to public capital markets. The BSE became the primary route through which Indian companies accessed equity capital from the public.

For most of its early history, the BSE operated as an open-outcry exchange - brokers would shout bids and offers on a physical trading floor. This system, colourful and dramatic though it was, had serious limitations in terms of speed, transparency, and reach. A broker in Chennai or Kolkata who wanted to trade on the BSE had to rely on a telephone call to a Mumbai-based member, introducing delays and the potential for miscommunication.

The transformation came in 1995 when the BSE launched its Bolt (BSE Online Trading) system, moving from open-outcry to an electronic order-matching platform. This was a watershed moment. Electronic trading meant that orders from anywhere in the country could be routed to the exchange almost instantaneously, that prices were displayed transparently on screens, and that the potential for manipulation through floor-based chicanery was sharply reduced.

In 2002, the exchange was reconstituted as a corporate entity under the Companies Act, moving from its earlier structure as a broker-owned association. This corporatisation was in line with global best practice and a SEBI mandate to professionalise Indian exchanges. In 2017, the BSE became the first listed stock exchange in India, completing its own initial public offering on the NSE - a moment of considerable historical symbolism.

Today, the BSE is a fully electronic, SEBI-regulated exchange that lists over 5,000 companies, handles trillions of rupees of trades each year, and connects millions of investors across India and abroad with the capital markets. It has come a very long way from that banyan tree on Bombay's waterfront.

How the BSE Works: The Mechanics of an Order-Driven Market

Understanding how the BSE actually processes a trade helps demystify what can feel like a complex and opaque system. At its core, the BSE operates as an order-driven, electronic market, meaning that trades happen when buy orders and sell orders submitted by market participants are matched by the exchange's central computer system.

When you decide to buy shares of a company listed on the BSE, you place an order through your broker's trading platform. This order specifies the company (identified by its unique BSE scrip code), the number of shares you want to buy, and either a specific price (a limit order) or an instruction to buy at whatever the best available price is (a market order). Your broker, who is a registered trading member of the BSE, receives your order and routes it electronically to the exchange's order-matching engine.

The exchange maintains what is called an order book for every listed security. This is a continuously updated electronic record of all pending buy orders (bids) and sell orders (offers) for a particular stock. Buy orders are ranked from highest price to lowest - because a buyer willing to pay more gets priority - and sell orders are ranked from lowest price to highest, because a seller willing to accept less gets priority.

When a new buy order arrives, the system checks whether any existing sell order has a price at or below what the buyer is willing to pay. If a match exists, the trade is executed automatically and instantaneously. If no match exists, the new order is added to the order book and waits. This continuous two-way auction runs during market hours, typically from 9:15 AM to 3:30 PM IST on weekdays, excluding exchange holidays.

There is also a pre-opening session from 9:00 AM to 9:15 AM during which orders are collected and an opening price is determined through a call auction mechanism, helping to prevent sharp gaps caused by news that emerged overnight.

Once a trade is executed, it must be settled - meaning the buyer must pay money and the seller must deliver shares. The BSE uses a T+1 rolling settlement cycle for equity shares, meaning that trades done on a given day (T) are settled on the very next business day. This settlement is handled through BSE Clearing Corporation Ltd (formerly Indian Clearing Corporation Limited), which acts as the central counterparty to every trade. By standing between every buyer and every seller, the clearing corporation eliminates counterparty risk - you do not need to worry about whether the person on the other side of your trade will actually deliver.

Shares you buy are credited to your Demat account, which is held with a Depository Participant linked to either NSDL or CDSL. The money for the purchase is debited from your linked bank account. The seamless integration of trading account, Demat account, and bank account is what makes the modern investing experience so smooth for retail investors.

It is also worth noting that the BSE uses a sophisticated surveillance system to monitor trading activity in real time. Circuit breakers are applied at the individual stock level (upper and lower price bands, typically 5%, 10%, or 20%) and at the index level, triggering trading halts if markets move too sharply in either direction. These safeguards are designed to prevent panic-driven crashes and give investors time to assess developments rationally.

Instruments Traded on the BSE: Beyond Just Stocks

Many people associate the BSE exclusively with buying and selling shares of listed companies. While equities are certainly the most visible and voluminous segment, the BSE is in fact a multi-asset marketplace where a wide range of financial instruments are traded.

Equities form the bedrock of the exchange. Over 5,000 companies across sectors - from large-cap conglomerates and public-sector undertakings to small and medium enterprises - list their shares on the BSE. Investors can trade in the cash segment (also called the equity segment) where actual shares change hands on a T+1 basis.

The equity derivatives segment allows investors to trade futures and options contracts based on individual stocks and indices. A futures contract is an agreement to buy or sell a specified quantity of shares (or an index value) at a predetermined price on a future date. An options contract gives the buyer the right, but not the obligation, to buy (call option) or sell (put option) at a specified price before expiry. Derivatives are powerful instruments that can be used for hedging an existing portfolio against adverse price movements or for taking leveraged speculative positions. However, they carry significant risks and are generally more suitable for experienced investors who understand how leverage can amplify both gains and losses.

The currency derivatives segment on the BSE allows participants to trade futures and options on currency pairs such as INR/USD, INR/EUR, INR/GBP, and INR/JPY. This segment is particularly valuable for businesses with foreign exchange exposures - an importer who knows they will need US dollars three months from now can lock in today's exchange rate using a currency futures contract, protecting themselves from adverse INR depreciation.

The debt segment covers government securities (G-Secs), treasury bills, state development loans, and corporate bonds. Retail investors can buy and sell these instruments on the exchange just as they would shares, providing a much more accessible entry point to fixed-income markets than the traditional over-the-counter (OTC) market where institutional investors dominate.

Mutual fund units are also traded on the BSE through its mutual fund platform. Exchange-traded funds (ETFs) - which are mutual fund schemes that are listed and trade on the exchange like shares - are a particularly popular product. Index ETFs tracking the Sensex, Nifty 50, gold, and various sectoral indices allow investors to gain diversified exposure with a single trade and at low cost.

The BSE also operates platforms for the issuance and trading of sovereign gold bonds (SGBs), bonds under the primary debt market platform, and instruments under the Social Stock Exchange - a relatively new initiative that allows certain non-profit organisations and social enterprises to raise funds from the public market.

This breadth of product offering means that the BSE is not just a venue for equity investors but a comprehensive capital market infrastructure that serves the financing and investment needs of the entire Indian economy.

The Sensex: India's Most Famous Financial Barometer

If there is one number associated with the BSE that virtually every Indian recognises, it is the Sensex. Formally known as the S&P BSE Sensex (where S&P refers to the global rating agency that now co-brands the index), the Sensex is a free-float market-capitalisation-weighted index comprising 30 of the largest, most liquid, and financially sound companies listed on the BSE.

The Sensex was launched on 1 January 1986 with a base value of 100, representing the aggregate market capitalisation of its constituent stocks on that date. Today, the index reflects the collective market value of those 30 companies relative to that 1986 base, making it one of the longest-running equity benchmarks in emerging markets. When you hear that the Sensex has crossed 80,000 points, what that means is that the aggregate free-float market capitalisation of its 30 constituents has grown 800 times since the base period.

The composition of the Sensex is reviewed periodically by a dedicated index committee at BSE. Companies are selected based on criteria including market capitalisation, trading frequency, sector representation, and financial health. The 30 constituents are drawn from across the Indian economy - banking and financial services, information technology, energy, consumer goods, pharmaceuticals, metals, and more - making the index a reasonably representative snapshot of the overall health of Indian corporate India.

The index is calculated using a free-float market capitalisation methodology. This means that instead of using the total number of shares outstanding for a company, only the shares that are freely available for trading in the market (excluding promoter holdings, government stakes, and strategic holdings) are used to compute the company's weight in the index. This approach better reflects the actually tradeable portion of the market and is the global standard for index construction.

Because the Sensex tracks only 30 large-cap stocks, it is sometimes criticised for being too narrow. To address this, BSE has developed a family of broader indices. The BSE 100, BSE 200, and BSE 500 include progressively larger numbers of companies, capturing mid-cap and small-cap stocks as well. There are also sectoral indices - BSE Bankex for banking stocks, BSE IT for information technology companies, BSE Healthcare for pharma and hospital companies, and many others - that allow investors and analysts to track specific segments of the market.

For retail investors, the Sensex serves multiple purposes. It acts as a benchmark - if your equity portfolio returned 15% over a year but the Sensex returned 20%, your portfolio underperformed the market. It serves as a market mood indicator - a rising Sensex generally signals investor optimism about corporate earnings and the economy, while a falling Sensex signals the opposite. And it underpins a variety of investable products: Sensex-tracking index mutual funds, Sensex ETFs, and Sensex futures and options contracts are all widely used.

The daily movement of the Sensex is influenced by a complex interplay of factors: corporate earnings announcements, domestic macroeconomic data (GDP growth, inflation, RBI monetary policy decisions), global events (US Federal Reserve policy, geopolitical tensions, commodity prices), and the flow of money from foreign portfolio investors (FPIs) and domestic institutional investors (DIIs). Understanding these drivers, even at a high level, helps investors contextualise market movements rather than reacting emotionally to every swing.

BSE vs NSE: Understanding India's Two Major Exchanges

India has two major national stock exchanges: the BSE and the National Stock Exchange (NSE). New investors often wonder how the two differ, which one to use, and whether they need to choose between them.

The NSE was established in 1992 and began trading operations in 1994, nearly 120 years after the BSE's founding. It was set up with a specific mandate to bring modern technology, transparency, and competition to Indian capital markets, which at the time were dominated by the BSE. The NSE introduced screen-based electronic trading from day one, whereas the BSE was still using open-outcry at the time. The competition between the two exchanges fundamentally transformed Indian markets, driving down transaction costs, improving transparency, and expanding investor access.

Today, the two exchanges overlap substantially in what they offer. Most large and mid-cap Indian companies are listed on both exchanges. This dual listing means that if you want to buy shares of a prominent Indian company, you can do so on either the BSE or the NSE. Because prices on both exchanges are linked by arbitrageurs who exploit tiny price differences instantly, the price of a stock on the BSE and the NSE are almost always identical in practice.

The most visible difference is in their flagship indices. The BSE's benchmark is the Sensex (30 stocks), while the NSE's benchmark is the Nifty 50 (50 stocks). Both are widely followed, but the Nifty 50 has become the more dominant benchmark for derivatives trading and for institutional investors, largely because it covers a broader set of 50 stocks and because the NSE's derivatives market is far larger in terms of trading volumes.

In terms of overall equity trading volumes, the NSE has consistently handled a larger share of cash equity and derivatives trading. However, the BSE remains significant and in certain segments - particularly currency derivatives and the SME platform - has its own distinct strengths.

One area where the BSE has a clear and important distinction is its SME (Small and Medium Enterprises) platform. The BSE SME Exchange, launched in 2012, provides a dedicated listing and trading venue for smaller companies that may not meet the stringent listing criteria of the BSE's main board. This platform has enabled hundreds of smaller Indian businesses to access public equity capital, diversify their ownership, and gain credibility with customers, suppliers, and financiers. Many SME platform companies eventually graduate to the main board as they grow.

From a practical standpoint for retail investors, the choice between the two exchanges is largely irrelevant for buying shares - you will access both through the same broker and trading account, and your orders will be routed to whichever exchange offers the best price. What matters more is ensuring you have a good broker, a functional Demat account, and a clear investment strategy.

It is worth noting that both exchanges are regulated by SEBI under the Securities Contracts (Regulation) Act, 1956, and the SEBI Act, 1992. Both must adhere to the same regulatory standards regarding listing requirements, investor protection, and market surveillance.

Listing on the BSE: How Companies Raise Capital

One of the BSE's most important functions - perhaps its most economically significant function - is providing companies with a mechanism to raise capital from the public. This happens through the primary market, where new securities are issued for the first time, as distinct from the secondary market where existing securities are traded between investors.

The most common primary market event is an Initial Public Offering, or IPO, through which a private company offers its shares to the public for the first time and lists on the exchange. An IPO is a transformative event for a company - it raises capital that can be used for expansion, debt repayment, or other corporate purposes; it creates a public price for the company's shares; and it gives early investors (founders, venture capitalists, private equity firms) the ability to partially monetise their holdings.

To list on the BSE's main board, a company must meet eligibility criteria set by SEBI and the exchange. These include minimum net worth requirements, profitability track record (or, under certain alternative criteria, demonstrated track record in specific sectors), minimum public shareholding requirements, and governance standards relating to board composition and related-party transactions. These requirements are designed to protect retail investors from putting money into companies that are too financially fragile or too poorly governed.

Once listed, companies have ongoing obligations. They must file quarterly and annual financial results, disclose material price-sensitive information (such as acquisitions, major contracts, changes in senior management) promptly through the exchange's filing system, hold annual general meetings, and comply with SEBI's Listing Obligations and Disclosure Requirements (LODR) regulations. The exchange's surveillance team monitors for any breaches and can impose penalties, suspend trading, or delist companies that fail to comply.

Beyond IPOs, listed companies can raise additional capital through Follow-on Public Offers (FPOs), Rights Issues (where new shares are offered to existing shareholders at a discount), Qualified Institutional Placements (QIPs, where shares are placed directly with institutional investors), and the issuance of bonds through the debt platform.

For retail investors, the listing of a company's shares on the BSE is what enables them to participate. Before the public market era, ownership of most Indian businesses was confined to a small group of promoters, financiers, and institutional investors. The stock exchange democratised ownership, allowing ordinary individuals to become shareholders in the country's most important enterprises and to share in their growth over time.

The BSE also operates a special category called the 'T Group' for securities that are traded on a trade-for-trade basis - meaning each trade results in mandatory delivery and no netting of positions is allowed. This category is typically applied to companies under surveillance due to unusual price movements or corporate concerns. Investors should be particularly cautious about trading in T Group stocks.

Regulatory Framework: SEBI and the BSE

No discussion of the BSE would be complete without a thorough understanding of the regulatory environment in which it operates. The Securities and Exchange Board of India, commonly known as SEBI, is the apex regulatory body for India's securities markets and exercises comprehensive oversight over the BSE and all participants in its ecosystem.

SEBI was established as a statutory body under the SEBI Act, 1992, with a three-fold mandate: protecting the interests of investors in securities, promoting the development of the securities market, and regulating the securities market. Over the three decades since its establishment, SEBI has grown into one of Asia's most active and credible securities regulators, continuously updating its rules to keep pace with market developments and to address emerging risks.

The BSE itself is a recognised stock exchange under the Securities Contracts (Regulation) Act, 1956. As a recognised exchange, it must operate in accordance with SEBI's directives and must seek SEBI approval for significant changes to its rules, byelaws, and trading conditions. SEBI conducts regular inspections of the exchange's operations, technology systems, and governance to ensure compliance.

From an investor's perspective, SEBI's regulatory framework touches virtually every aspect of the investing experience. SEBI sets the rules for who can become a registered stockbroker and what qualifications and capital requirements they must meet. It prescribes how client funds must be segregated from broker funds, preventing misuse. It mandates the disclosure standards that listed companies must follow. It regulates the conduct of investment advisers and research analysts to prevent conflicts of interest. And it runs a robust enforcement machinery to investigate and penalise market manipulation, insider trading, and other securities law violations.

Particularly important for retail investors is SEBI's investor protection infrastructure. SEBI mandates that investors can escalate complaints against brokers and listed companies through SEBI's SCORES (SEBI Complaints Redress System) platform. There are also investor protection funds maintained by the BSE from which investors can claim compensation (subject to limits) if a broker defaults and is unable to meet its obligations.

Another significant regulatory dimension is the Know Your Customer (KYC) requirement. All investors must complete a KYC process - providing identity proof, address proof, bank account details, and PAN card information - before they can open a trading and Demat account and begin trading on the BSE. This requirement, mandated by both SEBI and RBI's anti-money laundering regulations, helps ensure the integrity of the financial system.

Recent years have seen SEBI take a particularly active role in investor education, recognising that a well-informed investor base is the best protection against fraud and market abuse. The regulator requires brokers to provide new clients with risk disclosure documents and mandates that margin requirements and leverage limits be clearly communicated. SEBI also periodically updates rules around derivative trading to manage speculative excess - for example, changes to lot sizes, expiry structures, and margin requirements for index options have been introduced in recent years to moderate retail speculation in the F&O segment.

For investors, the key takeaway is that the regulatory framework - while not perfect - provides substantial protections that did not exist in earlier generations. Trading on a SEBI-regulated exchange like the BSE is fundamentally different from, and far safer than, informal or unregulated investment schemes.

Investor Participation: Who Trades on the BSE and How

The BSE is not a club for the wealthy or the professionally trained - it is designed to be accessible to any individual who is a resident Indian (or, with certain conditions, an overseas Indian or foreign investor), has a valid PAN card, and meets the basic KYC requirements. Understanding the landscape of who participates in the market, and how, helps retail investors position themselves wisely.

The broadest categorisation of market participants divides them into retail investors, domestic institutional investors (DIIs), and foreign portfolio investors (FPIs).

Retail investors are individual investors like you - people who invest their personal savings in the market, typically in relatively modest amounts compared to institutions. Retail participation in Indian equity markets has grown substantially over the past decade, driven by rising incomes, increased financial literacy, the proliferation of low-cost discount brokers, and the convenience of mobile trading apps. The number of active Demat accounts in India has crossed well into the tens of millions and continues to grow, a testament to the mainstreaming of stock market investing as a savings and wealth creation tool for ordinary Indians.

Domestic institutional investors include mutual funds, insurance companies, pension funds (including the Employees' Provident Fund Organisation, or EPFO, which has begun investing a portion of its corpus in equities), and banks. These large entities manage the pooled savings of millions of individuals and deploy them in markets in accordance with their mandates. DIIs are a stabilising force in the market - they tend to be long-term investors who buy on dips when retail sentiment turns negative, providing support to prices.

Foreign portfolio investors are regulated entities based outside India - global asset managers, sovereign wealth funds, hedge funds - that are registered with SEBI and invest in Indian securities. FPI flows are an important driver of market performance; large inflows from foreign investors can push indices up, while significant outflows (often triggered by global risk-off sentiment or a strengthening US dollar) can push them down. Tracking FPI activity is a useful indicator of global sentiment towards Indian markets, though retail investors should be careful about making short-term trading decisions purely on the basis of FPI flow data.

To participate in the BSE, a retail investor needs to complete three steps: open a Demat account (to hold shares in electronic form), open a trading account with a registered broker (to place buy and sell orders), and link both to a bank account for fund transfers. Discount brokers have made this process faster and cheaper than ever before, with many investors completing the entire account-opening process online in a matter of days.

Once your accounts are set up, you can trade in the cash equity segment, invest in mutual funds and ETFs, and, if you qualify and understand the risks, participate in the derivatives segment. It is important to start with products you understand fully, to diversify your investments, and to have a clear sense of your own risk tolerance and investment horizon before committing money to the market.

Investors should also be aware of the costs involved in BSE trading. These include the broker's commission or brokerage, the STT (Securities Transaction Tax) which is a statutory levy on the value of trades, exchange transaction charges, SEBI turnover fees, stamp duty (which varies by state for physical delivery trades, now standardised at the federal level for Demat trades), and the GST applicable on brokerage and transaction charges. These costs, while individually small as percentages, can add up meaningfully for frequent traders and should be factored into any assessment of net returns.

BSE's Role in India's Economic Development

Beyond its function as a marketplace for trading securities, the BSE plays a profound and multifaceted role in India's broader economic development. Understanding this role helps investors appreciate why healthy, well-functioning stock markets are a public good, not merely a vehicle for personal profit.

The most fundamental economic function of the BSE is capital allocation. A thriving stock exchange directs capital - the savings of millions of households - towards its most productive uses. When a promising company in a high-growth sector can raise money cheaply by issuing shares to the public, it can invest in new factories, hire engineers, fund research and development, and expand operations. The stock market's pricing mechanism - constantly reassessing the value of companies based on their prospects - helps ensure that capital flows towards ventures with genuine economic merit rather than those favoured by political connections or personal relationships.

The BSE also plays a critical role in creating a savings culture and providing an inflation-beating vehicle for ordinary Indians. Historically, Indian household savings were concentrated in physical assets (real estate, gold) and low-yielding bank deposits. Over time, as financial literacy has grown and the mutual fund industry has expanded, more households are channelling savings into equities - directly through the BSE or indirectly through Systematic Investment Plans (SIPs) in equity mutual funds that invest in BSE-listed stocks. Equity investment over long periods has historically been an effective way to grow wealth in real terms, though of course past performance is no guarantee of future results and all equity investments carry risk.

The exchange also serves as a governance mechanism for Indian corporations. The requirement to disclose financial results quarterly, to hold transparent AGMs, to constitute independent board committees, and to obtain shareholder approval for significant decisions disciplines company managements in ways that private ownership does not. When institutional investors and retail investors can freely vote with their feet - selling shares of poorly managed companies and buying shares of well-run ones - corporate managements face a constant incentive to perform. This market discipline, imperfect as it can be, is an important complement to regulatory oversight.

At the macroeconomic level, the performance of the Sensex and BSE markets is closely watched by the government and the RBI as a barometer of economic sentiment. A buoyant stock market signals business confidence, can lead to a wealth effect that supports consumer spending, and can make it easier for companies to raise equity capital. Conversely, a prolonged market slump can tighten financial conditions, raise the cost of capital, and signal that investors expect a slowdown in corporate earnings.

The BSE's SME platform deserves special mention in the economic development context. By providing listing access to smaller companies, it helps them raise growth capital, improve governance standards, and gain visibility with customers and business partners. This is particularly important in an economy like India's where small and medium enterprises are the backbone of employment and industrial output.

Finally, the BSE is a significant employer and ecosystem builder in its own right. Beyond its own staff, the exchange supports an enormous ecosystem of stockbrokers, sub-brokers, investment advisers, research analysts, technology vendors, clearing banks, and depositories. The financial services industry centred on the BSE and the broader capital market contributes meaningfully to Mumbai's status as India's premier financial centre.

Example

Key benefits

How it works

1. 1
   Open a Demat and Trading Account

   Investors must first open a Demat account (to hold shares electronically) and a trading account (to place orders) with a SEBI-registered broker, completing the mandatory KYC process including PAN card, identity proof, and bank account linking.

2. 2
   Place an Order

   Through the broker's platform, the investor places a buy or sell order specifying the BSE-listed security, the quantity, and the order type (market order for immediate execution at best price, or limit order at a specific price).

3. 3
   Order Routing to BSE

   The broker's system routes the order electronically to the BSE's central order-matching engine, where it is recorded in the live order book for that particular security.

4. 4
   Order Matching

   The BSE's matching engine continuously pairs compatible buy and sell orders - a buy order at a given price is matched with the best available sell order at that price or lower - and executes the trade instantaneously.

5. 5
   Trade Confirmation

   Once matched, both the buyer and seller receive a trade confirmation from their respective brokers. The trade details are reported to the clearing corporation and to the exchange's surveillance system.

6. 6
   Settlement via Clearing Corporation

   BSE Clearing Corporation Ltd acts as the central counterparty, guaranteeing settlement. Under T+1 settlement, shares are credited to the buyer's Demat account and funds are debited from the buyer's bank account (and vice versa for the seller) on the next business day.

7. 7
   Post-Trade Compliance

   Investors must report capital gains from BSE trades in their income tax returns, comply with applicable tax deductions, and maintain records of all transactions for audit purposes, in accordance with the Income Tax Act and SEBI's guidelines.

Formula

Sensex = (Sum of Free-Float Market Cap of 30 constituent stocks / Base Market Cap) × Base Index Value (100)

Free-Float Market Cap of a stock = Current Market Price × Free-Float Shares Outstanding

Key takeaways

Frequently asked questions

Related terms