Nano Cap

AAA

DEFINITION of 'Nano Cap'

Small public companies with a market capitalization below $50 million. Investors looking to invest in nano-cap companies should be aware that these small firms are often associated with a very high risk of failure. Conversely, nano-cap stocks are often referred to as "penny stocks," which are quite popular with novice investors who have a large appetite for risk.

INVESTOPEDIA EXPLAINS'Nano Cap'

This is as small as you can get. Nano caps are very risky because they are such small companies. Keep in mind that classifications such as "large cap" or "small cap" are only approximations that change over time. Also, the exact definition of the various sizes of market cap can vary between brokerage houses.

RELATED TERMS
  1. Large Cap - Big Cap

    A term used by the investment community to refer to companies ...
  2. Small Cap

    Refers to stocks with a relatively small market capitalization. ...
  3. Micro Cap

    A publicly traded company in the United States that has a market ...
  4. Mid Cap

    A company with a market capitalization between $2 and $10 billion.
  5. Mega Cap

    The biggest companies in the investment universe, as measured ...
  6. Market Capitalization

    The total dollar market value of all of a company's outstanding ...
Related Articles
  1. Markets

    Understanding Small- And Big-Cap Stocks

    If you don't realize how big small-cap stocks can be, you'll miss some good investment opportunities.
  2. Options & Futures

    Finding Undiscovered Stocks

    Wall Street tends to focus on large cap stocks, leaving other stocks under-followed and undervalued.
  3. Insurance

    Market Capitalization Defined

    Find out the differences between mega-, large-, mid- and small-cap stocks and how each suits different investing styles.
  4. Markets

    An Introduction To Small Cap Stocks

    When it comes to a company's size, bigger isn't always better for investors. Find out more here.
  5. Active Trading

    Parched For Profits? Try Beverage Stocks

    For diversification and profit potential, add a different kind of "liquidity" to your portfolio.
  6. Mutual Funds & ETFs

    The Top 3 ETFs For Investing in Commodities

    Explore diversifying an investment portfolio through investing in commodities ETFs, and get information on some of the best commodity funds.
  7. Mutual Funds & ETFs

    The Top 3 ETFs For Investing in Copper

    Learn about some of the best available ETFs, both commodity-based and stock-based, that investors can use to gain exposure to the copper market.
  8. Mutual Funds & ETFs

    The Top 3 ETFs For Investing in Sugar

    Discover information about the exchange-traded funds, or ETFs, that offer investors exposure to the basic agricultural commodity, sugar.
  9. Mutual Funds & ETFs

    Top ETFs for Investing in Coffee

    Learn about the market for coffee, one of the largest agricultural markets, and two ETFs that investors can use to obtain exposure to the coffee market.
  10. Credit & Loans

    The Lurking Dangers of Student Loans

    Student loans are popular, but they present many dangers.
RELATED FAQS
  1. Is there such a thing as a nano cap or micro cap index?

    While there are indexes that track micro cap stocks, there are few indexes tracking nano caps. Although definitions vary, ... Read Full Answer >>
  2. How does the stock market react to changes in the Federal Funds Rate?

    The stock market reacts to changes in the federal funds rate in various ways depending on where it is in the business cycle. ... Read Full Answer >>
  3. What are the requirements for being a Public Limited Company?

    The requirements for an entity to be considered a public limited company (PLC) include registration requirements, establishing ... Read Full Answer >>
  4. Is there a difference between financial spread betting and arbitrage?

    Financial spread betting is a type of speculation that involves a highly leveraged derivative product, whereas arbitrage ... Read Full Answer >>
  5. How do I place an order to buy or sell shares?

    It is easy to get started buying and selling stocks, especially with the advancements in online trading since the turn of ... Read Full Answer >>
  6. What is the difference between the return on total assets and an interest rate?

    Return on total assets (ROTA) represents one of the profitability metrics. It is calculated by taking a company's earnings ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Dog And Pony Show

    A colloquial term that generally refers to a presentation or seminar to market new products or services to potential buyers.
  2. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  3. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  4. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  5. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  6. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!