The term "cap stocks" refers to a type of security that limits the amount of shares outstanding. This means that there is an established maximum number of shares for the company, and once this limit has been reached, no more shares can be issued. The purpose behind capping the number of shares is usually to prevent dilution of existing shareholders' ownership stakes by increasing the total number of shares available in the market. This also helps maintain a stable value for the stocks as there will not be an excessive supply of them.