Float

Float is the number of shares of a company's stock available for public trading. It excludes shares held by insiders, founders, major shareholders, and restricted shares not yet available for sale.

Formula

Float = Shares Outstanding - Restricted Shares - Insider Holdings

Float is always less than or equal to shares outstanding.

Example

A company has 100 million shares outstanding. Insiders and restricted shares account for 30 million. Float = 100M - 30M = 70 million. Only these 70 million shares are available for trading; the other 30 million are held by people who can't (or won't) sell immediately.

How to Interpret It

• Large float (> 50 million): Lots of shares available for trading. Easy to buy or sell large positions without moving price much. Typical for large-cap stocks.
• Small float (< 10 million): Fewer shares available for trading. Price can be volatile if many shares are bought or sold. Typical for micro-caps or newly public companies.
• Float as % of shares outstanding: If float is 40% of outstanding, 60% is held by insiders/restricted. Less supply = more potential volatility.
• Short interest as % of float: If 20 million shares are shorted and float is 70 million, short interest is 28.6% of float. High percentages signal potential for short squeezes.
• Insider concentration: High insider holdings (low float ratio) can indicate strong founder conviction but also limited liquidity.

Limitations

• Float can change suddenly if insiders sell or restricted shares vest, increasing available supply.
• Large institutional holders might not be "public" but their shares are in float and can be sold.
• Different regulatory definitions of "public float" exist; 13F filers, Rule 144 restricted holders, and others complicate the exact count.
• High float doesn't guarantee liquidity in penny stocks; most trading volume might be in a small number of shares.

Related Terms

• Shares Outstanding — total shares issued, including restricted and insider shares
• Short Interest — number of shares borrowed and sold short
• Liquidity — ability to buy or sell without moving price
• Volatility — price fluctuation magnitude, often related to float size