Term · Liquidity & Trading
Free Float (Streubesitz)
In briefThe free float (Streubesitz) is the portion of shares that circulates freely in the market, i.e. without large, permanently held blocks. For small caps it substantially shapes liquidity and therefore how easily investors can enter and exit.
Definition
The freely tradable share portion without large, tightly held blocks.
How it is calculated
Formula. Free float (%) = freely tradable shares / total number of outstanding shares x 100.
Why it matters for small caps
For small caps, the free float substantially determines liquidity and thus the entry and exit opportunities for investors.
Common misreadings
- A high free float is automatically equated with high liquidity - actual trading volume can nonetheless be low.
In the process
Frequently asked
What is free float (Streubesitz)?
It is the portion of shares that is actually traded freely in the market. Tightly held large blocks do not count towards it.
How is the free float calculated?
You divide the freely tradable shares by the total number of outstanding shares and express the result as a percentage. This shows the tradable portion.
Does a high free float automatically mean high liquidity?
Not necessarily, because actual trading volume can still remain low. Free float is a precondition, but not a guarantee, of liquidity.
Related terms
Sources
Primary
STOXX – Guide to the DAX Equity Indices
https://www.dax-indices.com/document/Resources/Guides/DAX\_Equity\_Indices.pdf
https://www.dax-indices.com/document/Resources/Guides/DAX\_Equity\_Indices.pdf
Methodology
Deutsche Börse – Marktstruktur
https://www.deutsche-boerse.com/dbg-de/maerkte-services/ps-preipo-listing/ps-marktstruktur
https://www.deutsche-boerse.com/dbg-de/maerkte-services/ps-preipo-listing/ps-marktstruktur
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.