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.

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

  • small cap —  In the U.S. financial market, small cap companies or mutual funds include those with less than $500 million in value …   American business jargon

  • 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

  • small-cap — adjective of stocks of companies with a market capitalization of less than one billion dollars • Syn: ↑small capitalization, ↑small capitalisation • Pertains to noun: ↑market capitalization, ↑market capitalisation (for: ↑sm …   Useful english dictionary

  • small cap — /smɔl ˈkæp/ (say smawl kap) noun Finance, Stock Exchange a company which has a market capitalisation in the low range, relative to all the companies listed on a particular stock exchange. See big cap, mid cap …   Australian English dictionary

  • Small Cap — Unter einem Nebenwert versteht man eine Aktiengesellschaft, deren Aktien nicht dem Aktienindex DAX oder einem vergleichbaren, internationalen Index angehören, oder eine Aktiengesellschaft mit relativ geringem Börsenwert oder geringen… …   Deutsch Wikipedia

  • small cap — noun see small capital …   New Collegiate Dictionary

  • small-cap — /smawl kap /, adj. designating a company, or a mutual fund that invests in companies, with a market capitalization of under $1 billion: considered to have more growth potential and higher investment risk. * * * …   Universalium

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