Small-capitalization (small cap) stocks
Definition: [crh] The stocks of companies whose market value is less than $1 billion.
Small-capitalization stock
Shares of relatively small publicly traded corporations with a total market capitalization of less than $2.3 billion are typically considered small-capitalization, or small-cap, stocks.
Small-capitalization (small-cap) fund
A mutual fund that invests primarily in stocks of companies whose market value is less than $1 billion.
Nasdaq small-capitalization companies
A group of 2000 companies with relatively small capitalization, which are listed separately and have at least two market makers.
Nasdaq stock market ...
A small-capitalization benchmark index made up of 600 domestic stocks chosen for market size, liquidity, and industry group representation.
Straddle ...
Reducing the difference between the bid and ask prices of a security. Nasdaq small-capitalization companies
A group of 2000 companies with relatively small capitalization, which are listed separately and have at least two market makers.
Standard & Poor's SmallCap 600 Index A small-capitalization benchmark index made up of 600 domestic stocks chosen for market size, liquidity, and industry group representation.
Studies have suggested this holds only for small-capitalization stocks. In recent years, there is less evidence of a January effect. Japanese Association of Securities Dealers Automated Quotation System (Jasdaq) Japanese equivalent of Nasdaq.
This may include the Dow Jones Industrial Average, Standard & Poor's 500 Index, indices of mid- and small-capitalization stocks, foreign stock indices, and bond indices, to name a few.
These so-called anomalies include, among others, the 'small-firm effect' and the 'January effect,' which together document the tendency of small-capitalization stocks to earn excessive returns, especially in January.
Short for a small-capitalization stock or stock fund that invests in the stock of smaller companies that generally have low revenues but high growth potential.
However, if the fund's investment style focuses on small-capitalization stocks, bigger isn't always better. The success of many small-cap stock funds often depends on their ability to move in and out of holdings quickly.
Small Stock Index
An index measuring a basket of small-capitalization stocks (companies whose revenues are typically under $500 million) which are thought to be representative of changes in the stock prices of small companies as a whole.
Small-capitalization companies are generally more volatile than the stocks of mid-cap or large-cap companies, therefore small-cap funds may not be suitable for investors with a short investment horizon.
For stock funds, the investment style indicates whether a fund emphasizes stocks of large-, medium, or small-capitalization companies and whether it emphasizes stocks with growth or value characteristics or a blend of these characteristics.
January effect
Refers to the historical pattern that stock prices rise in the first few days of January. Studies have suggested this holds only for small-capitalization stocks. In recent years, there is less evidence of a January effect.
Termbox ...
The style and general ideology of investment practiced by an investor. Certain investors favor small-capitalization stocks, while others prefer large blue-chip stocks, for example.
Investment product line (IPL) ...
Liquidity risk is usually higher in over-the-counter markets and small-capitalization stocks. Foreign investments can pose liquidity risks as well.
Investment philosophy
The style and general ideology of investment practiced by an investor, for example certain investors favor small-capitalization stocks, while others prefer large blue-chip stocks.
Small-capitalization stocks tend to be subject to large fluctuations; therefore, the potential for short-term gains and losses is great. Small-cap value stocks Stock of companies with market capitalization between $250 million and $1.
 See also: Funding, Saving, Stock symbol, Bills, Expense
  
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