Stock Data Inputs
Free Float Metrics
A Free Float Calculator helps investors and financial analysts determine the actual number of shares available for public trading. Not all outstanding shares of a company are easily tradable. Many shares are held by insiders, company executives, or government entities. By removing these locked shares from the total count, you get the true free float.
How to Calculate Free Float
Finding the free float is a simple process of subtraction. You take the total number of shares a company has issued and subtract the restricted shares that cannot be readily sold on the open market.
Free Float Shares = Total Outstanding Shares - Restricted Shares
Free Float Percentage = (Free Float Shares / Total Outstanding Shares) * 100
For example, if a company has 10000000 total shares and the founders lock up 3500000 shares, the remaining 6500000 shares represent the free float. Dividing 6500000 by 10000000 gives a free float percentage of 65 percent.
How to Use This Tool
- Enter the Total Outstanding Shares issued by the company. You can usually find this number on their latest earnings report or balance sheet.
- Enter the Restricted Shares. These are closely held shares owned by insiders, promoters, or strategic investors.
- Input the Current Share Price. The calculator uses this to determine market capitalizations.
- Review your Free Float Percentage to understand the liquidity of the stock.
- Check the Free Float Market Cap. Many major stock indexes use this metric rather than total market cap to decide index weightings.
Frequently Asked Questions
Why is free float important to investors?
Free float directly impacts stock liquidity and volatility. A stock with a very small free float percentage has fewer shares available to buy and sell. This means that a sudden increase in demand can cause massive price spikes, while a sudden rush to sell can crash the price easily. High free float stocks generally offer more stable and predictable price movements.
What is Free Float Market Capitalization?
Standard market capitalization values a company by multiplying its total outstanding shares by the current share price. However, Free Float Market Capitalization only multiplies the freely tradable shares by the share price. Major financial index providers, like S&P Dow Jones and FTSE, use the free float method because it better reflects the true market value available to public investors.
What is considered a low free float?
A free float percentage below 15 to 20 percent is generally considered low. These low float stocks are often heavily targeted by day traders because their limited supply makes them highly volatile and susceptible to rapid price swings.