Float (Shares Available for Trading)

Float refers to the number of shares of a public company that are freely available for trading in the open market. Float is calculated by subtracting restricted shares (insider holdings, employee stock options not yet exercisable, shares held by institutional investors under lock-up agreements) from the total shares outstanding.

A company might have 50 million shares outstanding, but if insiders own 30 million shares that cannot be sold under current agreements, the float is only 20 million shares. This 20 million figure is the supply available for trading.

Float Size and Volatility

Float size is inversely correlated with volatility at any given level of trading volume. A stock with a 2 million share float that trades 500,000 shares in a single hour is turning over 25% of its entire available supply — each new order has more price impact. A stock with a 200 million share float trading the same 500,000 shares is turning over 0.25% — individual orders have minimal price impact.

Float and Event Reactions

Low float amplifies the price impact of any given volume. A biotech with a 3 million share float and 25% short interest that receives an FDA approval combines minimal share supply with possible forced short covering. The same FDA approval on a large-cap biotech with a 500 million share float typically produces a much smaller percentage move because the supply is sufficient to absorb the demand. TradeAI News shows short interest as a percentage of float on each ticker page; float is not used to prioritize or deliver events.