The Comprehensive Guide to

Passive Income Investing


Learn the secrets of how Paul Tracy generates over $XXX,XXX per month in passive income!

How to Become Financially Independent Through Passive Income Investing

What is Float?

A company's float is an estimate of the number of outstanding shares available for the public to trade.

How Does Float Work?

Float, sometimes referred to as free float or 'public' float, does not include restricted shares (shares owned by company officers, management, and other various insiders) because it's assumed that those shares are being held on a very long-term basis.

Float is generally described as all shares held by investors, other than restricted shares held by company insiders. The equation for float is very straightforward:

Float = Outstanding Shares - Restricted Shares

So if Company XYZ has 100 million shares outstanding, and 30 million are considered restricted shares, then the float would be the remaining 70 million shares available for trading (100 million - 30 million = 70 million).

Why Does Float Matter?

Looking at a company's float can be very helpful to prospective investors because it provides some insight into the stock's volatility. Stocks with small floats tend to be more volatile because there are only a limited number of shares that can be bought or sold in the event of major trading news. For the same reason, companies with larger floats tend to be less volatile.

Also, institutional investors usually prefer to invest in stocks with a large floats, since they can purchase or sell a significant number of shares without impacting the share price much.

Ask an Expert about Float

All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Float.

Be the first to ask a question

If you have a question about Float, then please ask Paul.

Ask a question
Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.