Intraday trading. Why is market cap important?

[cashclay]

I understand the float is important because you can determine if the stock can really move or not. But why is market cap important for intraday tradings and the stocks ability to move. Isnt the float the thing that only really matters in this case? Thank you

 

[AR15]

A stock with a 2 million dollar market cap takes 2 million dollars to double

A stock with a 2 trillion dollar market cap takes 2 trillion dollars to double

 

[newwurldmn]

I understand the float is important because you can determine if the stock can really move or not. But why is market cap important for intraday tradings and the stocks ability to move. Isnt the float the thing that only really matters in this case? Thank you

even float doesn’t matter. Only volume that you can access.

 

[virtusa]

even float doesn’t matter. Only volume that you can access.

Porsche wanted to buy VW in 2008. Because of the very low float, the opposite happened. VW bought Porsche.
So float is important.Float is the volume that you theoretically can access.

https://www.cinemonic.com/the-biggest-short-squeeze-in-history-volkswagen-short-squeeze-of-2008/

 

[newwurldmn]

Porsche wanted to buy VW in 2008. Because of the very low float, the opposite happened. VW bought Porsche.
So float is important.Float is the volume that you theoretically can access.

https://www.cinemonic.com/the-biggest-short-squeeze-in-history-volkswagen-short-squeeze-of-2008/

High float doesn’t matter if it’s controlled by 1 guy who doesn’t want to sell his shares.

 

[Scataphagos]

I understand the float is important because you can determine if the stock can really move or not. But why is market cap important for intraday tradings and the stocks ability to move. Isnt the float the thing that only really matters in this case? Thank you

Disagree that either is important.

Markets move by a small number of players hitting the bid/ask. Your only concern about volume should be "handle"... and that's only if you're making a big play.

 

[virtusa]

High float doesn’t matter if it’s controlled by 1 guy who doesn’t want to sell his shares.

Shareholders that buy and hold are not part of the float. That's the definition of float. Float is the number of shares available for trading.

Size of the float affects volatility.
Small float means hefty reaction if big orders are placed. Which can lead to a higher float as holders might sell at that higher price.
Large float reduces impact on price if big orders are placed.

 

[newwurldmn]

Shareholders that buy and hold are not part of the float. That's the definition of float. Float is the number of shares available for trading.

Size of the float affects volatility.
Small float means hefty reaction if big orders are placed. Which can lead to a higher float as holders might sell at that higher price.
Large float reduces impact on price if big orders are placed.

even then if the same small number of shares trade actively you can have ample liquidity to trade intraday. if there are a large number of shares and they don't trade actively it is difficult to trade intraday.

 

[Snuskpelle]

You could say it's how large of a relative impact a certain amount of money has on the share price, but it's not the whole story.

Investors/traders in larger cap companies tend to be more informed, actually caring about current and forward yields, etc. Doubling profit is way harder than doubling share price. So competition is tougher but also more fair up there, which translates to lower volatility.

Compare that to a make believe asset like Bitcoin with a respectable market cap, which instead has huge volatility. Even the pros have trouble valueing it.