noun, verb, capped, cap⋅ping.| 1. | a close-fitting covering for the head, usually of soft supple material and having no visor or brim. |
| 2. | a brimless head covering with a visor, as a baseball cap. |
| 3. | mobcap. |
| 4. | a headdress denoting rank, occupation, religious order, or the like: a nurse's cap. |
| 5. | mortarboard (def. 2). |
| 6. | Mathematics. the symbol ∩, used to indicate the intersection of two sets. Compare intersection (def. 3a). |
| 7. | anything resembling or suggestive of a covering for the head in shape, use, or position: a cap on a bottle. |
| 8. | summit; top; acme. |
| 9. | a maximum limit, as one set by law or agreement on prices, wages, spending, etc., during a certain period of time; ceiling: a 9 percent cap on pay increases for this year. |
| 10. | Mycology. the pileus of a mushroom. |
| 11. | Botany. calyptra (def. 1). |
| 12. | Mining. a short, horizontal beam at the top of a prop for supporting part of a roof. |
| 13. | a percussion cap. |
| 14. | British Sports. a selection for a representative team, usually for a national squad. |
| 15. | a noise-making device for toy pistols, made of a small quantity of explosive wrapped in paper or other thin material. |
| 16. | Nautical. a fitting of metal placed over the head of a spar, as a mast or bowsprit, and having a collar for securing an additional spar. |
| 17. | a new tread applied to a worn pneumatic tire. |
| 18. | Architecture. a capital. |
| 19. | Carpentry. a metal plate placed over the iron of a plane to break the shavings as they rise. |
| 20. | Fox Hunting. capping fee. |
| 21. | Chiefly British Slang. a contraceptive diaphragm. |
| 22. | to provide or cover with or as if with a cap. |
| 23. | to complete. |
| 24. | follow up with something as good or better; surpass; outdo: to cap one joke with another. |
| 25. | to serve as a cap, covering, or top to; overlie. |
| 26. | to put a maximum limit on (prices, wages, spending, etc.). |
| 27. | British Sports. to select (a player) for a representative team. |
| 28. | Fox Hunting. to hunt with a hunting club of which one is not a member, on payment of a capping fee. |
| 29. | cap in hand, humbly; in supplication: He went to his father cap in hand and begged his forgiveness. |
| 30. | set one's cap for, to pursue as being a potential mate. |
cap 1 (kāp) n.
[Middle English cappe, from Old English cæppe, from Late Latin cappa.] |
cap
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Capping
1. The practice of selling large amounts of a commodity or security close to the options expiry date in order to prevent a rise in market price.
2. An attempt to keep a stock's price low or move its price lower by putting selling pressure on it.
Investopedia Commentary
1. The investor who might practice capping is a call option writer. If practicing capping, he or she is trying to avoid having to transfer the underlying security or commodity to the option holder. The goal is to have the option expire worthless so that the premium initially received by the writer is protected.
2. This is a violation of NASD rules.
Related Links
Options Basics Tutorial
Going Long On Calls
See also: Back Months, Congestion, Corner, Cost of Tender, Current Delivery, NASD, Offset
cap
An upper limit on the interest rate to be paid on a floating-rate note.
See capitalization.
CAP abbr.
catabolite gene activator protein