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Investing & the Stock Market vocabulary · Stocks & Shares

Free float

Meaning in investing & the stock market, with examples

/ˌfriː ˈfloʊt/nounCommon term

In investing & the stock market, free float means: The part of a company's shares that can actually be traded on the market, excluding shares held by controlling owners, the state or other long-term holders.

In Turkish: halka açıklık oranı, fiili dolaşımdaki pay oranı, halka açık kısım

How it is used

Usually given as a percentage: a free float of 25 percent. Index providers use free float to decide weights, so a company with a small free float has less weight in the index. A low free float can make a stock less liquid and more volatile.

Example sentences

  1. With a free float of only 10 percent, the stock can move sharply on small orders.

  2. The main shareholder sold a stake to increase the free float and attract index funds.

Common collocations

  • free float ratio
  • low free float
  • increase the free float
  • free-float adjusted
  • liquidityHow easily an asset can be bought or sold quickly without a big change in its price. A liquid market has many buyers and sellers.
  • market capitalizationThe total market value of a company's shares, calculated by multiplying the share price by the number of shares in issue.
  • listed companyA company whose shares are officially admitted to trading on a stock exchange, so anyone can buy and sell them and the company must publish regular information.
  • indexA number that shows how the prices of a selected group of shares or bonds change over time, used to measure a whole market or sector.
  • volatilityHow much and how quickly the price of an investment or a market moves up and down. High volatility means large, frequent price swings.

More terms: Stocks & Shares

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This page explains English vocabulary for learners. It is not financial advice.