The float of a company whose stock is publicly traded has different default meanings depending on the presumed context.[1] Without a qualifier it may refer to the entire market capitalization of the company or only its publicly traded equity.
Public float or the unqualified term may also refer to the number of outstanding shares in the hands of public investors as opposed to company officers, directors, or controlling-interest investors.[2] Assuming the insider held shares are not traded, these shares are the publicly traded ones. The float is calculated by subtracting restricted shares from outstanding shares. For example, a company may have ten million outstanding shares, but only seven million are trading on the stock market. Therefore, this company's float would be seven million. Stocks with smaller floats tend to be more volatile than those with larger floats[1]. Large holdings of founding shareholders, corporate cross-holdings and holdings of the Government in partially privatized companies are usually excluded while computing this sense of "public float".