Secondary Stock


DEFINITION of 'Secondary Stock'

A stock that is considered riskier than blue chips because it has a smaller market capitalization. A secondary stock can relate to any type of company, in any industry. The primary definer of a secondary stock is the company's market cap, with any company's equity shares trading under a certain "large cap" level being considered a secondary stock.

BREAKING DOWN 'Secondary Stock'

Secondary stocks are more commonly referred to as mid-, small- or micro-cap stocks, depending upon their market capitalization. While market capitalization is a definite driver of a stock's risk level, most view large-cap stock as less risky than secondary stocks, due primarily to their market cap. Secondary stocks however often times can be less volatile than large cap stocks, thus all else held equal, being a less "risky" investment than a large cap.

  1. Micro Cap

    A publicly traded company in the United States that has a market ...
  2. Large Cap - Big Cap

    A term used by the investment community to refer to companies ...
  3. Blue Chip

    A nationally recognized, well-established and financially sound ...
  4. Mega Cap

    The biggest companies in the investment universe, as measured ...
  5. Nano Cap

    Small public companies with a market capitalization below $5 ...
  6. Market Capitalization

    The total dollar market value of all of a company's outstanding ...
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