What is the market cap range for a micro-cap?

The SEC says companies with a market capitalization of less than $250 or $300 million are often called microcap stocks. FINRA uses the same $250 to $300 million figure. It is a convention, not a rule, and data vendors and funds draw their own lines.

What is a nano-cap stock?

The SEC says the smallest public companies, with market capitalizations of less than $50 million, are sometimes called nanocap stocks. The term has no regulatory meaning, and the SEC's microcap bulletins use "microcap" to cover both.

Is a small-cap stock safer than a micro-cap?

Size alone does not settle that. The SEC describes microcap stocks as having more limited public information, lower liquidity and higher volatility than larger companies' stocks, but each company's filings and trading history matter more than its label.

Are micro-caps and penny stocks the same thing?

No. Market cap is price times shares outstanding. A penny stock is an SEC trading-rule category based mainly on a $5 price line, listing venue and issuer size. A company can be a micro-cap and not a penny stock, and the reverse.

Where do I find a company's shares outstanding to compute market cap?

Use the cover page of its latest 10-K or 10-Q, which reports shares outstanding as of a recent date. Multiply by the current share price. A stale share count can misstate market cap, especially for a company that issues stock often.

Small Cap vs Micro Cap vs Nano Cap: Market Cap Ranges

Small-cap, micro-cap and nano-cap have no single official definition. What the SEC and FINRA say, how index providers differ, and how to compute market cap.

Small-cap, micro-cap and nano-cap are informal size labels based on market capitalization, and none has an official definition. The SEC says companies with a market capitalization of less than $250 or $300 million are often called microcap stocks, and the smallest, under $50 million, are sometimes called nanocap. For retail investors in micro-caps, the label is a rough guide to how much public information to expect, not a legal category.

What market capitalization measures

Investor.gov defines market capitalization as the value of a corporation determined by multiplying the current public market price of one share by the number of total outstanding shares.

Illustration with made-up numbers: a company has 40,000,000 shares outstanding and trades at $2.50. Market cap is 40,000,000 x $2.50 = $100,000,000. If it issues 10,000,000 new shares and the price stays at $2.50, market cap becomes $125,000,000, but the stake of each existing holder is diluted. See stock dilution.

Market cap is not enterprise value, and it is not the same as float, which is the portion of shares freely available to trade. A company with a $100 million market cap and 20% float has about $20 million of shares in the public’s hands, which can matter more for trading than the headline number. See float vs shares outstanding.

What the SEC and FINRA say

The SEC’s investor bulletin states that the term microcap stock “applies to companies with low or micro market capitalizations” and that companies below $250 or $300 million are often called microcap stocks, although many have market capitalizations of far less. It continues that the smallest public companies, below $50 million, are sometimes called nanocap stocks, and then uses microcap to refer to both.

FINRA’s guidance on low-priced stocks defines microcap stocks as those issued by companies with market capitalization of less than $250 to $300 million.

The SEC’s bulletin is a 2016 educational document, and the thresholds are conventions. They do not appear in any rule, and no rule changes for a company when it crosses them.

Where “small cap” sits

There is no SEC definition of small-cap. Funds, index providers and data vendors each choose their own bands, and the bands move as markets rise and fall. To see how far apart the cut-offs can be, look at index methodology. The FTSE Russell release on its June 2026 reconstitution reports $146.4 million as the market cap of the smallest company in the Russell 2000 and $5.7 billion as the large-cap/small-cap breakpoint. In that index family, therefore, “small-cap” can stretch from about $146 million up to several billion dollars, and FTSE Russell publishes a separate Russell Microcap Index with its own membership rules. A micro-cap by the SEC’s $250 to $300 million rule of thumb can therefore sit inside a fund’s or index’s “small-cap” bucket.

Label	Common usage	Source type
Nano-cap	Under about $50 million	SEC bulletin (convention)
Micro-cap	Under about $250 to $300 million	SEC and FINRA (convention)
Small-cap	Varies by fund or index; no official figure	Index methodology, fund prospectus

If a fund describes itself as small-cap or micro-cap, its prospectus on EDGAR states the definition it uses. Different funds and indexes use different ranges. Index breakpoints are reset periodically, and FTSE Russell moved to a semi-annual reconstitution in 2026.

Why the cut-offs keep moving

Market caps rise and fall with prices, so any fixed dollar line catches different companies in different years. The SEC’s $250 to $300 million rule of thumb dates from a 2016 bulletin, and FINRA repeats the same range. Index providers reset their breakpoints on a schedule: FTSE Russell’s 2026 release describes the smallest Russell 2000 company’s market cap rising by nearly 23% from 2025. A micro-cap in one year can sit in a different bucket the next year without anything changing at the company.

Illustration with made-up numbers: a company with a $240 million market cap is below the SEC’s $250 to $300 million convention. If its shares rise 30% with no change in share count, its market cap becomes $312 million, above that range, while the business is exactly the same. A study or screener that uses a fixed label will drop it from “micro-cap” without noting why.

This is also why a source that says “micro-cap” without a number is incomplete. When you see a size label in an article, a fund name or a screener, look for the dollar range it uses and the date it was set.

Size is not venue

Size, price and venue are three separate properties:

Property	What it is	Test
Market cap	Price x shares outstanding	Arithmetic from the cover page and quote
Penny stock	SEC trading-rule category	Rule 3a51-1: price under $5, venue and issuer-size exclusions
OTC vs listed	Where it trades	Exchange listing or OTC Markets tier

A company with a $200 million market cap can be listed on Nasdaq and not be a penny stock. A $20 million company can be quoted on the OTC markets and be a penny stock. A $400 million company can trade over the counter. For the trading-rule definition see penny stocks, and for venues see OTC markets explained.

OTC Markets’ own tier chart shows size can matter at the top: OTCQX requires a $25 million initial and $10 million ongoing market capitalization, while OTCQB and OTCID have no market-cap requirement. Exchange listings also set market-value tests. See Nasdaq listing requirements.

Why the smaller labels carry more risk

The SEC’s risk bulletin points to features that tend to scale with smallness: reliable public information is often limited, trading volumes are low, and any trade can move the price. These factors make microcap stocks more volatile and easier to manipulate than the stocks of larger companies. FINRA notes similar liquidity and information risks for low-priced stocks. The point is a pattern across a category, not a statement about any company in it.

What to check in the filings

Shares outstanding. The cover page of the latest 10-K or 10-Q gives a recent count. Use that, not an old figure from a data site.
Share classes. Companies with multiple classes need market value for each; check the cover page and the equity note.
Securities that could convert. The notes list warrants, options and convertible notes, which could raise the fully diluted share count. Fully diluted market cap can differ a lot from basic market cap.
Public float disclosure. The 10-K cover page states the aggregate market value of shares held by non-affiliates as of the end of the second fiscal quarter, which separates float from insider holdings.
Recent issuance. Registration statements, 424B prospectuses and 8-Ks that disclose share sales change the count after the cover-page date.

Red flags vs normal

Usually normal	Worth a closer look
Different sites quoting different market caps	A market cap computed from a share count that predates a large issuance
A company moving between size labels as its price moves	Price moves with no filing to explain a change in size
A micro-cap listed on an exchange	A very small market cap with no current SEC or OTC disclosure

For a process that starts from these numbers, see how to research a micro-cap.

FAQ

What is the market cap range for a micro-cap?: The SEC says companies with a market capitalization of less than $250 or $300 million are often called microcap stocks. FINRA uses the same $250 to $300 million figure. It is a convention, not a rule, and data vendors and funds draw their own lines.
What is a nano-cap stock?: The SEC says the smallest public companies, with market capitalizations of less than $50 million, are sometimes called nanocap stocks. The term has no regulatory meaning, and the SEC's microcap bulletins use "microcap" to cover both.
Is a small-cap stock safer than a micro-cap?: Size alone does not settle that. The SEC describes microcap stocks as having more limited public information, lower liquidity and higher volatility than larger companies' stocks, but each company's filings and trading history matter more than its label.
Are micro-caps and penny stocks the same thing?: No. Market cap is price times shares outstanding. A penny stock is an SEC trading-rule category based mainly on a $5 price line, listing venue and issuer size. A company can be a micro-cap and not a penny stock, and the reverse.
Where do I find a company's shares outstanding to compute market cap?: Use the cover page of its latest 10-K or 10-Q, which reports shares outstanding as of a recent date. Multiply by the current share price. A stale share count can misstate market cap, especially for a company that issues stock often.