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Float
Float
Definition
The number of a company's shares available for public trading, excluding restricted shares and insider holdings.
Why It Matters
Low float stocks are capable of explosive moves because limited supply meets sudden demand. Understanding float helps you identify which stocks have the potential for significant price movement.
Real Example
A company has 50 million shares outstanding, but 40 million are held by insiders and restricted. The float is only 10 million shares. If buyers want 2 million shares, that's 20% of the float — the price will spike.