Module 1 — Foundations
Market capitalisation and float
5 minute read
In plain English
Market capitalisation is share price multiplied by total shares. Float is the number of shares actually available to trade.
Why it matters
A small float means fewer shares changing hands, which is why some small companies move violently on modest volume.
Example
Two companies both at $300 million market cap: one with a 200 million float barely moves; one with a 6 million float can double in a day.
Try this
Compare the float figure of the three most active tickers on the Radar today.
Common mistake
Treating a low float as a reason to buy. It is a reason to expect larger moves in both directions.
What this does not mean
A low float does not predict direction. It describes how violently price can react.
Educational content only. Not financial advice.