Some numbers are just too big to fit into a fixed-size number representation. For example, can't be represented, because the exponent 500 won't fit into two digits, and the mantissa is as large as it can be. Numbers that are too large for our representation schema can arise during a computation. When overflow occurs, some language implementations signal an error and stop the computation. Others designate some symbol, called infinity, for all numbers that are too large.
Arithmetic operations are aware of infinity and propagate it.
This is also called overflow, though to emphasize the distinction people sometimes say overflow in the negative direction. DrScheme's inexact number system uses an infinity value to deal with overflow.