Glossary · Stocks and markets
Free float
The free float is the part of a company’s shares that anyone can actually trade, leaving out shares held by founders, governments and other locked-in owners.
Also called: float, public float, free-float shares, floating stock
Nvidia: shares held by outside investors, valued on July 25, 2025, from its annual report.
In plain words
A family bakery issues 100 shares. The founders keep 60, the town’s pension fund holds 10 under a long agreement, and 30 are traded freely by the public. Only those 30 can realistically be bought: the bakery’s free float is 30%.
Big companies work the same way. Shares held by founders, executives, governments, parent companies or investors who promised not to sell are counted out; what is left is the float. A company can be huge and still have a small float.
Index makers count only the float. The S&P 500 weights each company by the market value of its freely traded shares, not all of them, so a company whose founder holds half of its shares counts for only about half its size.
Example
Two companies of the same size
- Company A and Company B are both worth $100 billion on the market.
- A is widely owned: 95% of its shares trade freely. Free-float value: $95 billion.
- B’s founder owns 60% and the government 15%, so only 25% trades. Free-float value: $25 billion.
- In a float-weighted index A counts almost four times as much as B, and index funds must buy almost four times as much of it.
A small float can also make a share jumpier: fewer shares change hands, so big orders move the price more.
One level deeper
Two related ideas share the name. The free float (the index makers’ term) is the part of a company’s shares available to investors once strategic holders are left out. The public float (a US legal term) is the value of the shares held by non-affiliates, meaning anyone other than officers, directors and controlling owners; every US company must state it on the cover of its annual report (10-K).
That figure is measured on the last business day of the company’s second fiscal quarter. In its latest annual report, Nvidia stated a public float of $4.0T, as of July 25, 2025.
A small float matters around IPOs, when often only a small part of a company is sold at first, and in a short squeeze, when many of the few tradable shares have been sold short.
Why it matters
It decides how much of each company index funds must buy: trillions of dollars follow float-weighted indexes.
It tells you how easy a share is to trade, and how much a few big owners control the company.
Exchanges and index makers set minimum floats for a company to list or to join an index.
A common mistake
Myth: Everything in a company’s market value can be bought on the market.
In fact: Only the float is really for sale. When founders or governments hold most of the shares, the part that trades can be a small fraction of the market value, and its price can swing more.
Questions people ask
What is the difference between free float and shares outstanding?
Shares outstanding are all the shares a company has issued and not bought back. The free float is the part of them available to trade, once locked-in holders are left out.
Why does free float matter for an index?
Because index funds must be able to buy what the index holds. Weighting by float keeps a company with few tradable shares from getting a weight the market could not supply.
Where can I find a company’s public float?
On the cover page of its annual report (Form 10-K in the US), stated in dollars as of the middle of its fiscal year. Our largest companies page ranks US companies by it.
Read more on BigCapital
About the numbers
- The numbers on this page are recalculated from the data every night; the sources are listed at the end of the page.
- NVIDIA CORP: SEC EDGAR XBRL company facts and submissions (financials); Wikipedia List of S&P 500 companies (sector, sub-industry, headquarters, dates).
- This page explains a term. It is not investment advice.