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Micro Cap or microcap stock is a term that describes companies with somewhat small or "micro" market capitalization, meaning the total value of the company's stock.
Micro cap companies generally have limited assets, and Micro cap stocks have a tendency to be priced lower and therefore trade in smaller volumes.
Many micro cap stocks trade in the Over The Counter Stock Market (OTC) market and OTC Bulletin Board (OTCBB) Micro Cap stocks might be priced lower and trade in smaller volumes, that doesn’t mean there is no risk involved. All investments involve some risk, micro cap stocks are among the most risky. However that being said, many investors still believe that these risks are outweighed by the large percentage returns that come with micro cap success. Pricing for micro cap stocks is more then likely going to be inefficient, seeing as fewer investors and analysts work in that area due to the somewhat small dollar amounts involved. What Is A Micro cap Stock? Micro Cap Stocks are stocks from companies with market capitalizations between $50 million and $300 million. A micro-cap stock isn't the smallest classification for a stock - nano cap is even smaller. It’s also important to keep in mind that classifications such as "large cap" or "small cap" are only approximations that change over time. Also, the term and definition of micro cap stocks can vary from one brokerage firm to another. Contact us for more information on Micro Cap Stocks Click here for more information on Small Cap Stocks |