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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 ?
It is important not to scratch or pick at the cradle cap, in case an infection develops.
Multiple authors note safety concerns when considering treatment for mild and self-limited conditions such as cradle cap.
If your baby has cradle cap, they may go on to develop eczema, so try to avoid using products containing perfumes.
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.
However, today variety of baby products are made available to choose from such as scented massage oils, calming lotions and cradle cap treatments to go with the earlier existing products.
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.
3 Check your child for cradle cap or dandruff on the scalp.
Helps ease wind and colic * and strengthens digestive system Soothes skin conditions and * allergies such as eczema, cradle cap and happy rash Stimulates all the organs and * systems of the body
C[yen]The daily workshops will also shed light on the general appearance of newborns, bathing the baby, cradle cap, diaper rash, taking care of babyCOs skin, general safety, hiccups and sneezing, burping , swaddling, umbilical care cord, breast feeding, bottle feeding, bowel movement and crying.
Diseases and conditions that can be mistaken for tinea capitis include seborrheic dermatitis, eczema, psoriasis, alopecia areata, cradle cap, traction folliculitis leading to traction alopecia, and the effects of head lice.
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.