An interest rate cap in which the total number of exercisable caplets is limited. That is, it is similar to an ordinary cap except that only a limited number of caplets can be exercised, specifically the first in-the-money caplets. This interest rate agreement enables the holder (i.e., the buyer) to hedge against increasing money market rates on a limited number of fixings, determined at the contract date.

The flexi cap has two different variations: a chooser cap and an autocap.