Small-cap trading terms, defined

An offering priced outside regular hours, when you cannot act and no circuit breaker is running. The stock reprices before you get a say.

The prospectus supplement filed when a company actually prices an offering off its shelf: how many shares, at what price, to whom. When one lands on a runner, the supply question stops being theoretical.

Trading between 16:00 and 20:00 ET. Where offerings get announced — and where a stop you left in place is not watching.

An at-the-market program lets a company drip shares straight into the open market at prevailing prices, with no announcement per sale. It is the invisible seller that caps rally after rally.

The ceiling on how many shares a company is legally permitted to issue. Room between authorized and outstanding is room to dilute you without asking.

The phase after a runner's high is in — lower highs, failed reclaims, sellers in control. Most of the short edge in this market lives here rather than at the top. Standard vocabulary: traders split a move into its frontside and its backside.

A contractual ceiling — commonly 4.99% or 9.99% — on how much of a company one buyer may hold. It is why large deals get split into shares plus pre-funded warrants the buyer converts in slices.

The stock you must rent in order to sell it short, and the fee you pay to rent it. On a hot small cap that fee can run to triple digits annualised, charged every day you hold.

A sharp advance followed by a tight, orderly pullback on lower volume — consolidation that holds its gains instead of giving them back.

Your broker closing your short for you because the borrowed shares were recalled. It happens at the market's price, not yours, and at a time you did not choose.

Exercising a warrant without putting up cash. The holder receives fewer shares but gets them instantly and can sell straight away.

Two parallel trendlines containing price. Useful for reading a move's rhythm, and for spotting the moment the rhythm breaks.

A stretch where price moves sideways in a tightening range. How long it lasts changes what the eventual break is worth.

New shares created and sold by the company. Every existing holder's slice gets smaller, and the new stock arrives as supply on the tape.

Selling into strength, usually by someone who bought lower or was issued stock. It looks like buying pressure on the tape and is the opposite.

A candle with a tiny body and wicks both ways — the interval was a fight and nobody won. On its own it is noise; at the top of a big run it is a first hint.

Shares traded multiplied by price — how much money actually moved. It separates a real move from a thin one far better than share count does.

Two attempts at roughly the same high, the second one failing. Evidence that a level is holding — not a guarantee that it will.

An exponential moving average — a rolling average weighted toward recent bars. Intraday, the 9 and 20 act as dynamic support and resistance while a trend is intact.

A long wick at the end of an extended move — a final push that was immediately and completely rejected.

A move giving back its gains. Most runners fade: the median gives back roughly 42% of its high-to-close move.

Price clears a level, cannot hold above it, and closes back inside. The buyers trapped above become the supply that drives the move back down.

The rare outcome far out in the distribution that an average hides. Sizing for the average case is how the tail ends an account.

The first meaningful dip after a move begins. Entering there rather than chasing is the difference between a defined stop and an undefined one.

The first session a multi-day runner closes below its open after a run. A widely watched inflection — and watched widely enough to sometimes fail.

Repeated pushes into the same horizontal ceiling with the lows rising underneath. A visible seller being tested.

The shares actually available to trade — total shares outstanding minus the ones locked up with insiders, restricted holders and affiliates. A small float is why a modest amount of buying can move a stock 200%.

Volume divided by float — how many times the entire tradeable supply changed hands today. A rotation above 1x means effectively everyone who owned it has sold to someone new.

The phase while a runner is still making higher highs. Fighting it is where most beginner short accounts go.

A provision that lowers a warrant's strike if the company later sells stock cheaper. The overhang follows the price down, which is how a falling stock keeps manufacturing new sellers.

A jump between one session's close and the next session's opening price, with no trading in between at those levels. Nothing you had working could act inside it.

A stock gaps up on a soft catalyst, opens into supply, and fades from the first minutes — the most common shape in this market. Standard trader slang, not our coinage: you will hear it on any small-cap desk.

A trading pause. Your position is frozen: no exits, no stops firing, and whatever the stock does on the reopen happens to you rather than with you.

A chain of halts: the stock halts up, reopens higher, runs into the band again, halts again. Between each one there is no market and no working stop.

Each pullback bottoms above the last one. It is the minimum evidence that buyers are getting more urgent, and the first thing to break when a trend ends.

High of day — the highest price traded so far this session, and the level every momentum trader is watching at the same moment.

An instruction to trade only at your price or better. It controls the price you pay but not whether you get filled at all.

How much you can trade without moving the price. A pattern that works at 500 shares can be untradeable at 50,000.

Permission from your broker, secured in advance, to short a specific number of shares. It is priced, rationed, and revocable — availability is not permanent.

Low of day — the session's lowest print, and the level a breakdown is measured against.

Each bounce tops below the last one — the mirror of a higher low, and the structural signature of the backside.

Limit Up-Limit Down — the circuit breaker that pauses a stock trying to trade outside a band around its recent average price. The bands run only between 09:30 and 16:00.

An instruction to trade at whatever price is available now. On a fast small cap it is a blank cheque — and during a halt reopen it fills at the auction price.

The low-participation stretch roughly 11:30-14:00 ET, where moves start and fail on thin volume.

The high and low of the session's first minutes. It is the reference frame the rest of the morning trades against.

A move whose slope keeps steepening until it cannot be sustained. The shape is unmistakable; the timing of its end is not.

Choosing share count from your stop distance and your maximum acceptable loss, rather than from how confident you happen to feel.

The last hour of regular trading, 15:00-16:00 ET, when position-squaring and the closing auction concentrate volume.

A warrant with a strike near zero, already paid for at the deal. It is economically stock that has not been counted yet — sitting outside shares outstanding and outside the float until the holder converts it.

Trading between 04:00 and 09:30 ET. Thinner, wider-spread, and with no LULD circuit breakers running.

The highest price traded before 09:30. The most-watched level on a gapper's chart, because it was set on thin liquidity and everybody can see it.

A company announcement. What matters is not that one exists, but whether it contains a hard financial fact or a hopeful sentence about the future.

Stock sold privately, typically restricted for a period. The supply is real but arrives later, and through a different door than a registered deal.

One R is the distance from your entry to your stop — your risk, expressed as a unit. Measuring results in R rather than dollars makes trades of different sizes comparable.

A coordinated push into a stock, followed by distribution into the buyers it attracted. There are tells, and most of them are in the share structure rather than the chart.

An offering of registered stock sold directly to investors. The point that matters on the tape: those shares can trade immediately, unlike a private placement.

When an indicator changes what it showed after the fact, so a signal looks better in hindsight than it did live. Candles do not repaint; some indicators do.

A price where sellers previously showed up in size — the ceiling side of the same idea as support.

Increasing size to win a loss back quickly. It is what converts an ordinary red day into the one that matters.

The company collapses many shares into one to lift the price, usually to keep an exchange listing. It changes no economics, and is very often followed by fresh dilution into the higher price.

The probability that an ordinary run of losses takes your account below the point it can recover from. It rises far faster with size than most people expect.

A small-cap that moves violently on a single day — in our census, one that doubled intraday on real money. The whole course is about how these days behave.

Today's volume measured against what this stock normally does by this time of day. The number that says whether anyone is actually paying attention.

A registration that pre-approves a company to sell stock later, on short notice. It is the licence, not the sale — but it means the sale can happen the moment the price is attractive to them.

Every share the company has issued, tradeable or not. Always larger than the float, and the gap between the two is where dilution hides.

A pre-approved registration letting a company sell stock later on short notice. The licence, not the sale — but it means the sale can come at any moment.

The difference between the price you expected and the price you got. It grows with size, with speed, and with everything that makes a runner exciting.

The distance between the best bid and the best offer. On a thin small cap it is a cost you pay on the way in and again on the way out, before the trade has done anything.

A rally fed by shorts being forced to cover, which buys more stock, which forces more covering. A short's loss is unbounded, and this is the mechanism that unbounds it.

A stop placed where the trade's premise is disproven — beyond the level, the wick, the structure — rather than at a round dollar amount that feels comfortable.

A price where buyers previously showed up in size. It matters because other traders remember it, not because the number has any power of its own.

Regulatory halt codes. T1 is news pending and usually clears the same day; T12 means the exchange wants answers the company has not given, and can last days or weeks.

Trading from the emotional aftermath of the last trade rather than from the setup in front of you. It is visible in your own log long before it is obvious in the moment.

Debt convertible into stock at a discount to the market price. The lower the price goes, the more shares the lender receives — so the financing feeds on the decline it causes.

A line drawn across successive highs or lows to make a trend's slope visible. It describes structure; it is not a force acting on price.

Volume-weighted average price — the average price paid today, weighted by size. It is where the day's money actually sits, which is why it behaves like a level rather than just a line.

The right to buy stock from the company at a fixed strike price. Above the strike, exercising becomes profitable — so a warrant overhang converts price strength into fresh supply automatically.

The thin line above or below a candle's body, marking a price that traded and could not hold. A wick is a rejected price.