Small Cap

Small Cap
Refers to stocks with a relatively small market capitalization. The definition of small cap can vary among brokerages, but generally it is a company with a market capitalization of between $300 million and $2 billion.

One of the biggest advantages of investing in small-cap stocks is the opportunity to beat institutional investors. Because mutual funds have restrictions that limit them from buying large portions of any one issuer's outstanding shares, some mutual funds would not be able to give the small cap a meaningful position in the fund. To overcome these limitations, the fund would usually have to file with the SEC, which means tipping its hand and inflating the previously attractive price.

Keep in mind that classifications such as "large cap" or "small cap" are only approximations that change over time. Also, the exact definition can vary between brokerage houses.


Investment dictionary. . 2012.

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Look at other dictionaries:

  • small-cap — A stock with a small capitalization, meaning a total equity value of less than $500 million. Bloomberg Financial Dictionary * * * small cap ˈsmall cap noun [countable] FINANCE a share in a company with a small amount of share capital (= total… …   Financial and business terms

  • Small Cap — D✓Small Cap [ smo:lkɛp ], der; s, s, Small|cap, der; s, s <englisch> (Wertpapier eines kleinen Unternehmens) …   Die deutsche Rechtschreibung

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  • small cap share — also small capitalization share ➔ Share …   Financial and business terms

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  • small-capitalization (small-cap) fund — A mutual fund that invests primarily in stocks of companies whose market value is less than $1 billion. Small cap stocks historically have been more volatile than large cap stocks, and often perform differently from the overall market. Bloomberg… …   Financial and business terms

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  • small-cap fund — A mutual fund that invests primarily in stocks of companies whose market value is less than $1 billion. Small cap stocks historically have been more volatile than large cap stocks, and often perform differently from the overall market. Bloomberg… …   Financial and business terms

  • small-cap — / smɔ:l kæp/ noun a share in a company with small capitalisation. ⇒ cap, mega cap, micro cap, mid cap …   Dictionary of banking and finance

  • small cap — noun 1. a corporation with a small capitalization this annual conference is a showcase for ambitious small caps • Hypernyms: ↑corporation, ↑corp 2. a character having the form of an upper case letter but the same height as lower case letters •… …   Useful english dictionary

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