Okay kiddo, have you ever seen a baseball player wear a hat with a logo on it? That's called a cap. In sports, a cap is something you wear on your head to show which team you play for.
But cap also means something else in sports, especially in the game of basketball. In basketball, the cap is a limit on how much money a team can spend on players' salaries.
Let me explain more. Every team has a certain amount of money they can spend on their players. They need to make sure they don't spend too much on one player or they won't have enough money left to sign other players. This is where the cap comes in - it helps teams keep track of how much they are spending so they don't go over budget.
So think of it like this: Just like you have a piggy bank to store your money and you can only spend what's inside of it, basketball teams have a cap to help them manage their money and make sure they don't spend more than they have.