Float and low float
A stock's float is the number of its shares that are free to trade: the shares outstanding minus the shares held by officers, directors and other insiders and large affiliated holders. A low-float stock has few shares available, so a burst of buying can move its price a long way, fast.
Why it matters to a small-cap momentum trader
Supply is half of every move. When news brings in more buyers than a small float can supply, sellers pull their offers and the price climbs through the book; the same thin supply makes the drop just as quick when the buyers leave. That is why two stocks with the same headline can move very differently, and why momentum traders filter for low float before anything else.
Float rotation, the day's volume divided by the float, says how many times the float has changed hands. A stock that trades its whole float in the morning is in play.
Float vs shares outstanding
Shares outstanding is every share the company has issued and not bought back. Float takes out the shares insiders and affiliates hold, which rarely trade during the day. Companies state these numbers in their SEC filings, and the numbers go stale: a small cap that sells new stock every few weeks has a bigger float than its last annual report shows. There is no single official float, so data vendors can show different numbers for the same stock on the same day.
Low float has no legal definition either. Many small-cap scanners draw the line at 20 million shares or fewer, and that is where the low-float scanners in Hindsight Markets draw it.
Float in Hindsight Markets
Float is read as of the day you replay, from the filings the SEC had accepted by that moment, so a replay never knows about an offering that came later. It is built to agree with the float small-cap day traders see on their own scanners. Where a company has not reported what its insiders hold, the number is the full share count, and the real float is lower. The scanner picture on the home page is the low-float gainers scan at 10:40 ET on 2026-09-16, with RETO and MEDS at the top.
A worked example: float and float rotation
An illustration with round numbers, not a real stock or a real day.
The float. A company has 40 million shares outstanding. Officers, directors and affiliates hold 32 million of them. Float = 40 million − 32 million = 8 million shares.
Rotation by 10:00 a.m. 12 million shares have traded. Float rotation = 12 million ÷ 8 million = 1.5, so the float has changed hands one and a half times.
The same volume on a big float. On a stock with a 120 million share float, the same 12 million shares is a rotation of 0.1. Same volume, far less pressure on the supply.
Volume counts a share every time it trades, so a rotation above 1 does not mean every holder sold. Day traders can pass the same shares back and forth many times in a morning.
Common mistakes small-cap traders make with float
- Trusting one float number. Vendors disagree and filings lag. A small cap that has just sold new stock or converted notes can have far more shares out than your scanner shows.
- Buying because the float is low. A low float makes a stock move fast in both directions. Without news and volume it is just a thin stock with a wide spread.
- Ignoring dilution. A small company short of cash often sells stock into a spike, through an offering or an at-the-market program. New supply can end a move in minutes.
- Sizing as if the stock were liquid. A thin float means a thin book. Size so you can get out at the bid without pushing the price far.
Common questions
- What is considered a low float?
- There is no official line. Small-cap day traders commonly use 20 million shares or fewer, and many call a float under 10 million very low. The low-float scan in Hindsight Markets uses 20 million.
- Is a low float good or bad?
- Neither. A low float lets a stock move a long way on news and volume, and it falls just as fast when buyers leave. It also tends to mean wider spreads and more LULD pauses.
- How is float calculated?
- Start from the shares outstanding in the company's SEC filings and subtract the shares held by officers, directors and affiliates, plus restricted shares. Each data vendor makes its own choices here, which is why their numbers differ.
- Can a stock's float change?
- Yes. Offerings, at-the-market sales, warrant exercises and note conversions add shares. Buybacks remove them. A reverse split cuts every share count by its ratio: after a 1-for-10 split, a 50 million share float becomes 5 million.
- What is float rotation?
- The day's volume divided by the float. A rotation of 1 means as many shares have traded as there are in the float. Traders read a high rotation as a sign that the stock is in play.
- What is short float?
- Short interest as a percentage of the float. A high short float on a low float can add fuel to a squeeze, but short interest is reported only twice a month, so the number is always somewhat old.
How to practise it in Hindsight Markets
- Open a past trading day and start it at 4:00 a.m. or at the 9:30 bell.
- Run the Small Cap Low Float Top Gainers scan: market cap under 2 billion dollars, float under 20 million shares, up at least 5%. Float rotation sits beside the float.
- Add the News today column to see which movers have a catalyst behind them.
- Open one whose rotation is climbing and watch Level 2 to see how little size sits at each price. Trade it with small size.
- Open the trade in the journal. Most in your favour and Most against you show how far it moved each way while you held it.
Practice this on a real past day in Hindsight Markets
Open a real trading day, run the low-float gainers scan as the morning unfolds, and trade what it finds with simulated money.