Float

A company's float is a subset of its total shares outstanding: it excludes shares owned by founders, executives, directors, and large strategic investors who are subject to lock-up restrictions or who rarely trade their holdings. The float represents the 'free' shares that change hands in normal market activity.

Float size critically affects liquidity and volatility. A company with 500 million shares outstanding but only 50 million in float (10% float) has restricted tradeable supply - the same demand pressure produces ten times more price movement than it would with a 100% float. Very low-float stocks ('low-floaters') are frequently the subject of short squeezes because a small amount of covering demand can create outsized price moves. They also attract momentum traders looking for rapid percentage gains.

Short interest as a percentage of float (days-to-cover) is a key short squeeze risk metric. Short interest of 30% of float means 30% of tradeable shares are borrowed and sold short - a large amount of forced buying if prices rise. Days-to-cover divides the total short position by average daily trading volume, representing how many days it would take shorts to cover if they all tried simultaneously. Values above 5–10 days signal elevated squeeze risk.

Float shrinks as companies execute buybacks (repurchasing their own shares, removing them from circulation) and grows when insiders sell holdings, secondary offerings occur, or previously locked-up shares vest.