Float
The number of shares freely available for public trading, excluding insider-held and restricted shares.
The float is the subset of shares outstanding that actually circulates on the open market. It excludes shares held by company insiders (founders, officers, directors) and shares under lock-up or vesting restrictions.
Float size has a direct impact on trading dynamics. A low float stock with heavy buying pressure can move violently because there are few available shares to absorb demand — this is the fuel behind many short squeezes and momentum runs.
Institutional ownership reports and insider filings let traders estimate real float. When insiders lock up shares after an IPO expire, float expands and can create selling pressure.
Example
A company has 100 million shares outstanding but insiders own 60 million under lock-up. The public float is only 40 million. A single large fund buying 4 million shares is absorbing 10% of the tradable supply — enough to move the stock meaningfully.
Related Terms
Days to Cover
Short interest divided by average daily volume. Estimates how many trading days it would take all short sellers to buy back their shares.
IntermediateIPO
The first time a private company sells shares to the public on a stock exchange, raising capital and creating a tradable market for the stock.
IntermediateMarket Capitalization
The total market value of a company's outstanding shares. Market Cap = Share Price × Shares Outstanding.
BeginnerMarket Maker (Equities)
A firm or individual that continuously quotes buy and sell prices for a stock, providing liquidity and enabling smooth trading.
AdvancedSecondary Offering
A new share issuance by an already-public company, or a large block sale by existing shareholders. Dilutive if the company issues new shares.
IntermediateShare
One indivisible unit of ownership in a company. Your ownership percentage equals your shares divided by total shares outstanding.
BeginnerShares Outstanding
The total number of a company's shares currently held by all shareholders, including insiders and institutions.
BeginnerShort Interest
The total number of shares currently sold short and not yet covered. Reported bi-weekly; high short interest can signal a crowded bet or squeeze risk.
IntermediateShort Selling
Borrowing shares and selling them, hoping to buy them back cheaper later. Profit = sell price minus buy-back price.
IntermediateShort Squeeze
A rapid price surge that forces short sellers to cover at a loss, which drives the price even higher in a self-reinforcing feedback loop.
AdvancedSmall Cap
Companies with a market capitalization roughly between $300 million and $2 billion. Higher growth potential but also higher risk than large caps.
Intermediate