investing guide

Float Shares Outstanding

float shares

So what does the term float shares outstanding mean?

The term float refers to shares owned only by outside investors.

As an example, if a company had 6 million outstanding shares, and company insiders owned 4 million shares. Then the float would be 2 million shares. Those 2 million shares are then traded on the stock markets during the day.

Many investors could careless about the number of outstanding shares or the float. However, some investors use these numbers to calculate the supply and demand for a stock. If there is to much supply the stock price will drop, and if there is to much demand the stock price will rise.

To a beginner, this kind of talk is probably a bit to much, but at least you will have some understanding of the terms.