- Micro-caps are stocks with a market capitalization between $50 million and $300 million.
- Micro-cap stocks tend to have more volatility, so they are inherently riskier than larger-cap stocks.
- Information on microcaps is limited, making research extremely important to avoid fraudulent stocks and other potential pitfalls.
- Another disadvantage of microcapitalization is limited liquidity due to the lack of coverage of analysts and institutional buyers.