Small Cap : A small cap is a stock whit a small market capitalization. Its generally considered to include companies whit a market capitalization between $300M and $2B. Small caps are often the trading instruments of pennystocking because big investors and hedge funds prefer to focus on larger markets.
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Penny Stock: Penny Stock, officially refers to stocks whit a price per share below $1.00. However, the expression is used on stocks priced between $0 and $15-$20 per share. Penny stocks are often considered as a risky investment due to their volatility and the fact that general public often misunderstands them.