Glossary
Float
The number of a company's shares available for public trading, excluding shares held by insiders and restricted holders.
A company's float is the number of its shares that can actually trade in the public market. It starts from shares outstanding and removes blocks that are unlikely to be sold soon: stakes held by officers, directors and controlling shareholders, and shares restricted by a lockup or by securities law. Float matters because it measures the supply of stock available to buyers and sellers, which affects liquidity, volatility and how indexes weight a company.
How it works
Data vendors define "insider" and "restricted" slightly differently, so float figures for the same stock can vary between sources.
Why traders and indexes care
- Low-float stocks can move violently: a modest wave of buying meets few sellers, which is one ingredient in a short squeeze.
- Short interest is usually quoted as a percentage of float, so a smaller float makes the same short position look larger.
- Index weighting. Major indexes such as the S&P 500 weight companies by float-adjusted market cap, so a company with a large controlling holder gets less index weight than its total market value suggests.
- Float changes with buybacks, secondary offerings, insider selling and lockup expiries.