# Small-Cap Stock

*Saving & Investing — Finicade finance glossary*

A small-cap stock is a company with a relatively small market value — roughly $300m to $2bn under common US definitions. Small caps have historically delivered higher long-run returns with higher volatility, the 'size premium' that underpins factor investing, though the premium has been weak in recent decades. They're less liquid, less researched and more likely to fail, which is precisely the argument for owning them as a diversified index rather than individually.

**Also known as:** small cap, small-capitalisation stocks, micro-cap

**Related terms:** [Large-Cap Stock](https://finicade.com/glossary/large-cap-stock), [Market Capitalization](https://finicade.com/glossary/market-capitalization), [Efficient-Market vs Factors](https://finicade.com/glossary/multi-factor-models), [Liquidity](https://finicade.com/glossary/liquidity), [Volatility](https://finicade.com/glossary/volatility)

Source: https://finicade.com/glossary/small-cap-stock