Free float
The share of a company's equity that is freely tradable in the public market.
Plain languagePractical exampleConnected reading
01
What is it?
The share of a company's equity that is freely tradable in the public market.
02
Why does it matter?
It can affect liquidity, index weight and the price impact of large orders.
03
How should it be read?
Check strategic, insider, locked-up and treasury holdings and the index provider's definition.
04
Common mistake
Assuming high free float always guarantees high trading volume.
A simple example
For two equally valued companies, lower free float can leave the order book thinner.