float investment & finance definition
- The
difference between the funds that a bank has on deposit with the Federal
Reserve and the funds that have been paid out of its account. Float adds to the
money supply and is one of the money supply statistics collected and reported
weekly by the Federal Reserve Bank of New York.
- The number
of shares of stock available to be traded multiplied by the price of the
shares. The bigger the float, the greater the stock’s liquidity.
See float in Wall Street Words
- Funds that are on deposit at two institutions at the same time because of inefficiencies in the collection system. This situation permits a person or firm to earn extra income because the two institutions are paying interest on the same funds. As an example, a person writes a check on a money market fund in order to make a deposit in a local financial institution. Until that check gets back to the bank on which it was written (a transit often entailing two or three days), the investor receives interest on his or her funds from both institutions. See also fail float.
- The number of shares in public hands and available for trading. Institutional investors require that a security have a large float before they will take a position in it. The large float guards against a substantial price change in the security while the institution is buying. Also called floating supply.
To permit a country's currency to change freely in value against foreign currencies.
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