Also known as public float, this refers to the portion of the total outstanding shares of a company that is in the hands of the public and hence available to be freely traded on the market. As the promoters of a company generally hold their shares for the long-run, and hence do not engage in daily buying or selling activity, only a portion of a company’s total outstanding shares is usually available for trading on the market. The shares of companies with sufficient free float, owing to their availability to buyers, usually exhibit lesser price volatility than companies whose shares are mostly held by a close group of promoters.