Quote:
Originally Posted by Hog's Gone Fishin
Yes ,I've heard that many times. "well, someone was dumb enough to buy my shares at this price"
Floating shares are available shares for sale. If there were no floating shares then there would have to be a buyer and seller for every transaction.
Correct??
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Kind of correct.
The float is the number of shares currently available for public trading, i.e. all shares not held by insiders. So for every "floating" share traded, there's a buyer and a seller. Sometimes those shares are held by market makers in order to maintain market liquidity, but technically those have a buyer and seller too, if you count the market makers as sellers/buyers.
Shares outstanding is the total number of shares the company has issued, including those held by insiders. So the number of shares outstanding is greater than the float 99.99% of the time - and the float can never be greater than the shares outstanding. Both the float and shares outstanding increase when a company issues more shares through an offering, which happens commonly when they need to raise money and have no revenues - like in the case of a biotech company developing a drug. The float can also increase when the lockout period ends for shares insiders hold.
Also keep in mind that the person who "was dumb enough to buy your shares" might have been a short-seller buying your shares to cover shares that they sold short.