What is share float?
In one line: A stock's float is the number of its shares that are available for the public to trade, after leaving out shares held by insiders or locked up.
A simple example
A company has 100 million shares in total. That's called shares outstanding.
- The founders and top managers hold 30 million.
- Another 10 million are locked up and can't be sold yet.
The float is 100 − 30 − 10 = 60 million shares. Those are the shares that actually change hands on the market every day.
Float vs shares outstanding
| Shares outstanding | Float | |
|---|---|---|
| Counts | Every share the company has issued | Only shares free to trade |
| Used for | Market cap (price × shares) | Supply on the market |
| Changes when | The company issues or buys back shares | Insiders sell, lock-ups end, shares are issued |
Why it matters
Float tells you how much supply there is. When few shares are available and lots of buyers show up, price has to move a long way to find sellers.
- Low float (often under about 20 million shares): can jump or drop 20%, 50% or more in a day on news. Spreads and Slippage can be large.
- High float (hundreds of millions or billions): usually moves more calmly, because there are so many shares to absorb buying and selling.
Float also sets the base for short interest: if 6 million of the 60 million floating shares are sold short, short interest is 10% of the float. Very high short interest is one ingredient of a Short squeeze.
More on what drives prices in what moves stock prices.
A common mistake
Treating a low-float spike as an easy chance. The same thin supply that sends price up fast can send it down just as fast, and stops can fill far from where they were set. If you trade these at all, use a much smaller size and set your stop from the chart, then size with the position size calculator.
Questions
Where do I find a stock's float?
Most broker apps and stock screeners list it. It comes from company filings with the SEC, so it can lag a little behind real changes.
What is a low-float stock?
There's no official cutoff. Many traders call a stock low-float when it has under about 10 to 20 million shares available to trade.
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