Indices · Index specialist topics · lesson 4 of 9 · 7 min read · David Alexander
Free float, and why weights are not market caps
free float
The portion of a company's shares actually available to trade, excluding stakes held by founders, governments, cross-holdings and other strategic holders. Most major indices weight by free-float capitalisation rather than full capitalisation, so a company's index weight can be far below its headline size.
This lesson is part of the advanced modules.
Modules 6 to 8 are included with a paid account. The definitional summary above is the whole of this page until then.