What are Microcap stock?

The stock of a US publicly traded company with a market capitalisation of between $50 million and $300 million.

Where have you heard about Microcap stock?

As microcap stock tend to be traded in low volumes at low prices, they can be overlooked by stockbrokers trading on the major exchanges. Companies with a market capitalisation of less than $50 million are often called ‘nanocap stocks’, but ‘microcap stock’ is sometimes used for any company with a market capitalisation of under $300 million.

What you need to know about Microcap stock.

Microcap stocks are often considered a risky investment as the companies are small and can go out of business. They also don’t have to meet the same minimum standards as companies that trade on stock exchanges and there’s likely to be less publicly available information about the company.

If you invest in the right company, microcap stocks can provide a good return as they have a high growth potential. All great companies start somewhere. But it’s equally possible to invest in a company that fails a year later. Because of this, many investors consider microcap stocks to be a speculative investment with high-risk, high-reward opportunities.

Find out more about Microcap stock.

Microcap stocks are usually traded over-the-counter rather than on a stock exchange. Find out what this means in our definition.