Ankle Biter Definition

Ankle biter is a term referred to stock issued with a Market capitalization of less than $500 million. In other words, they are small cap stocks. More formally, they are known as micro-cap stocks.

Generally, ankle biter or small-cap means the market cap of a stock is very small, but there's no formal rule as to where the cut off exists. Ideally, a stock with a market cap below $500 million is getting into ankle biter territory.

Ankle biter stocks are considered to be risky because of their speculative nature. However, the fancy name for small-cap socks can have some benefits such as - buying them by keeping a long-term horizon can profit well. Assuming the share of a small-cap company has the potential to grow over time. A trader should be smart in selecting the right ankle biter at the right time, and holding the stock for a long-term, and then selling at the right time. In fact, some small caps have proven to be potential profits in the long run then large-caps.