Float refers to a company’s shares that are free bought and sold without any restrictions by the public. These shares are the greatest proportion of stocks that are trading on the exchanges and what many of us read or hear about in the news and on television. All shares that float must be registered with the SEC.gov in order to buy and sell them. In other words, if you are a common shareholder you are a part of the float. It is important to pay attention to companies that have small floats as trading can be extra volatile with them, as any demand could send the stock soaring.
Outstanding shares refers to the number of stocks that a company has actually issued. Do not confuse this with authorized shares. Outstanding shares represents all of the shares that can be bought and sold by the public, as well as all the restricted shares that require special permission before being transacted.
Understanding a company’s outstanding shares is important because you can learn how volatile they are before deciding to buy or sell their stock.
Restricted shares refer to a company’s shares that cannot be bought or sold without special permission from the SEC.