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Float, also referred to as free float, is a number of outstanding shares of stock available for trading by the public. Float, however, does not include restricted shares. This means that shares owned by company officers, management, and various other insiders are not considered part of float. For example, if a company maintains two million shares of restricted stock out of the total of ten million shares outstanding, float would be the reaming eight million publicly traded shares. Companies with small float tend to have greater volatility, since a major trading event may have a substantial impact on the stock price. By the same token, companies with bigger float tend to be less volatile. In banking, float describes the amount of time from the deposit of a check until actual payment. |
