Small-capitalization (small cap) stocks

Small-capitalization (small cap) stocks

The stocks of companies whose market value is less than $1 billion. Small-cap companies tend to grow faster than large-cap companies and typically use any profits for expansion rather to pay dividends. They also are more volatile than large-cap companies, and have a higher failure rate.

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Small-capitalization (small cap) stocks

Stocks in a publicly-traded company with a low amount of market capitalization. In general, a small-cap company has a market capitalization of less than $1 billion or $2 billion, but there is no specific definition. Some brokerages or exchanges have slightly different definitions of small-cap. Some indexes track small-cap companies, as do some exchange traded funds. See also: High-cap, Mid-cap.