Lux
03-14-2006, 06:02 PM
The terms penny stocks, small caps, micro caps and nano caps are often interchangeable. While most investors refer to stocks (http://en.wikipedia.org/wiki/Stock) trading under $1 as penny stocks, the broader definition refers to the company's market capitalization (http://en.wikipedia.org/wiki/Market_capitalization) rather than its stock price.
The market capitalization (market cap) of a company is calculated by multiplying its stock price by the amount of shares outstanding, this number gives you the total dollar value of all the shares in the company at that moment in time.
Some firms consider any company under $2B in market cap as a small cap stock, others will apply the term to companies under $1B..
Micro caps will generally have market caps under $500M and are considered to be highly speculative stocks.
Nano caps is a term not often used, but generally refers to stocks with market capitalizations under $50M.
Traders and investors will simply refer to these smaller companies as small caps or penny stocks.
http://en.wikipedia.org/wiki/Penny_stock
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The market capitalization (market cap) of a company is calculated by multiplying its stock price by the amount of shares outstanding, this number gives you the total dollar value of all the shares in the company at that moment in time.
Some firms consider any company under $2B in market cap as a small cap stock, others will apply the term to companies under $1B..
Micro caps will generally have market caps under $500M and are considered to be highly speculative stocks.
Nano caps is a term not often used, but generally refers to stocks with market capitalizations under $50M.
Traders and investors will simply refer to these smaller companies as small caps or penny stocks.
http://en.wikipedia.org/wiki/Penny_stock
:huge: