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The cap is the maximum you can buy into a game for. For example, the $1/$3 game at my local casino has a $500 cap. This means that I can buy in for up to $500 in this game and any time I have less than $500 in my stack I can add on to my chip stack to reach $500 but I can not go above $500 (unless I win pots that take me over $500).