Small Cap Stocks

What Is Small Cap?

Small cap is a term used to classify companies with relatively small market capitalization. A company’s market capitalization is the market value of its outstanding shares. The definition of small cap can vary among brokerages, but it is generally a company with a market capitalization of between US$300 million and $2 billion.

KEY TAKEAWAYS

• A small cap is generally a company with a market capitalization of between $300 million and $2 billion.
• The advantage of investing in small cap stocks is the opportunity to beat institutional investors through growth opportunities.
• Small cap stocks have historically outperformed large cap stocks but have also been more volatile and riskier investments.