What are Small Cap Stocks?
The term refers to stocks with a small market capitalization, between US $250 million and $2 billion. Stocks with a market cap below $250 million are referred to as Micro Caps, and those below $50 million are called Nano Caps. Small Cap stocks can trade on any exchange although a majority of them are found on the Nasdaq or the OTCBB because of more lenient listing requirements. It is important to make the distinction between Small Caps and Penny Stocks. You can be a Small Cap without being a Penny Stock. There are plenty of Small Caps trading at more than $1 per share, with more liquidity than the average Penny Stock.
