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An upper limit on the interest rate on a floating-rate note (FRN) or an adjustable-rate mortgage (ARM). Also, an OTC derivatives contract consisting of a series of European interest rate call options; used to protect an issuer of floating-rate debt from interest rate increases. Each individual call option within the cap is called a caplet. Opposite of a floor.


1. Informal for market capitalization.

2. In a floating-rate note or an adjustable-rate mortgage (ARM), the highest possible interest rate. For example, if one has an adjustable-rate mortgage on a house, the interest rate fluctuates periodically. However, if the homeowner has a cap on the interest rate, there is a guarantee that it will never rise above a certain percent, no matter what the ARM formula would otherwise dictate. A cap is designed to protect the person or company making the interest payments. See also: Floor, Collar.


1. An upper limit on the interest rate to be paid on a floating-rate note.


A cap is a ceiling, or the highest level to which something can go.

For example, an interest rate cap limits the amount by which an interest rate can be increased over a specific period of time. A typical cap on an adjustable rate mortgage (ARM) limits interest rate increases to two percentage points annually and six percentage points over the term of the loan.

In a different example, the cap on your annual contribution to an individual retirement account (IRA) is $4,000 for 2006 and 2007 and $5,000 in 2008, provided you have earned at least that much. If you're 50 or older, you can make an additional catch-up contribution of $1,000 each year.




A ceiling on the adjustments that can be made in the payments or interest rate of an adjustable-rate loan.


Same as Float-Down.

References in periodicals archive ?
The cause of cradle cap isn't entirely clear, although it may be linked to overactive sebaceous glands, which are glands in the skin that produce an oily substance called sebum.
(1,4) Although each of these agents is used for infants with cradle cap, significantly sized randomized controlled trials in this age group are essentially absent.
In severe situations, an antiseborrhea (dandruff) shampoo may be prescribed by the physician to treat cradle cap. Rubbing baby oil, vaseline, or special ointments into the head in cradle cap may soften and loosen scalp scales so they may be more easily removed by brushing or combing.
These findings included dandruff, male pattern alopecia, premature greying, matting of hair, hemangioma, cradle cap, sparse hair and woolly hair.
Credited as the "newborn's best friend," Bean-B-Clean is the number one option for cradle cap (seborrhea) removal in infants and senior citizens.
If your baby has cradle cap, they may go on to develop eczema, so try to avoid using products containing perfumes.
The company's Gentle Naturals line includes Baby Eczema Cream, Eczema Baby Wash, Cradle Cap Care, Tummy Soother, Deet-Free Bug Repellent, Homeopathic Teething Drops and Earache Relief Drops.
My year-old-son Elliott had bad cradle cap as a newborn and although it's not as bad now, his scalp is still very dry.
While he was working, Nigel, who is in business PR, met someone whose daughter had suffered badly from cradle cap. "He had heard about a special soap that could be used for skin conditions and within a week it had cleared the cradle cap up.
Many Skin Salveation users claim it has been of tremendous benefit in eczema, psoriasis, acne, cradle cap, nappy rash, dermatitis, contact dermatitis, athletes foot and other fungal skin conditions.
Gerber has developed an innovative skin care item called Cradle Cap Kit to treat cradle cap, an unsightly condition that most commonly begins during a baby's first three months.
The Warwick-based operation uses raw, virgin, organic coconut oil from an ethical family-run farm in Thailand to produce Kokoso Baby - an all-in-one baby moisturiser, baby massage oil, nappy cream which can also be used to help improve dry skin, eczema, baby acne and cradle cap.