Free Float Calculator
Calculate the free-float percentage and number of shares available for public trading by subtracting closely held shares (insiders, governments, strategic stakes) from total shares outstanding.
How to use this tool
- Enter total shares outstanding, insider / promoter shares, government / strategic holdings and other restricted / locked-up shares in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your free float (%) and the full breakdown beneath it.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Free Float Shares = Total Shares − Closely Held Shares
Free Float % = (Free Float Shares / Total Shares) × 100
Closely Held Shares include insider / promoter holdings, government / strategic stakes, and any other restricted or locked-up shares not available for open-market trading.
How it works
Free float measures the proportion of a company's shares that are genuinely available for trading by the general public. Shares held by founders, management, governments, or under lock-up agreements are excluded because they do not circulate on the open market and therefore do not contribute to trading liquidity.
Free float is widely used by index providers (MSCI, FTSE, S&P) to weight constituents, as high closely-held ownership reduces the investable market cap. Many exchanges also impose minimum free-float thresholds for listing or index inclusion.
Worked example
Technology company float calculation
- Total shares outstanding: 10,000,000
- Sum all closely held shares: 2,000,000 (insiders) + 500,000 (government) + 500,000 (restricted) = 3,000,000
- Free Float Shares = 10,000,000 − 3,000,000 = 7,000,000
- Free Float % = (7,000,000 / 10,000,000) × 100 = 70.00%
Free Float = 70.00% (7,000,000 shares)
Common mistakes to avoid
- Including treasury shares (buybacks) in the closely held figure is correct, but many people forget them entirely, overstating the free float.
- Confusing free-float percentage with liquidity: a stock can have a high free-float percentage but still trade thinly if total market cap is small.
- Using authorized or issued shares instead of shares outstanding as the denominator, inflating the total and deflating the computed free-float percentage.
Key terms
- What is free float?
- Free float is the portion of a company's shares that are freely available for trading on the open market, excluding shares held by insiders, governments, and other restricted parties.
- Why does free float matter for index inclusion?
- Index providers weight stocks by their free-float market cap rather than total market cap, because only freely tradeable shares can be bought and sold by index-tracking funds without distorting prices.
- What counts as a closely held share?
- Shares held by company founders, executives, board members, governments, strategic investors, or subject to lock-up agreements are all considered closely held and excluded from free float.
- What is float-adjusted market cap?
- Float-adjusted market cap equals the share price multiplied by the number of free-float shares only. It reflects the value of shares actually tradeable in the market.
Frequently asked questions
- Why does free float matter for index inclusion?
- Major indices like MSCI and FTSE weight constituents by float-adjusted market cap, not total market cap. A low free float shrinks a stock's effective weight and can even disqualify it from inclusion below certain thresholds.
- Do convertible bonds count as closely held shares?
- Not until conversion. Unexercised convertible instruments are excluded from shares outstanding, so they do not affect the free-float calculation unless the conversion has already taken place.
- What threshold is considered low free float?
- There is no universal rule, but many exchanges and analysts flag free floats below 25% as low. Such stocks often see higher volatility and wider bid-ask spreads because the limited supply amplifies price swings on large orders.