DEFINITION of 'Average Daily Float'

1. The dollar amount of checks or other negotiable instruments that are in the process of collection over a certain period, divided by the number of days in the period; or

2. The number of company shares that are actually outstanding and available for trading on the public market on an average daily basis.

BREAKING DOWN 'Average Daily Float'

The banking term for float is most commonly applied to banks, although it can also refer to large corporations who have both checks deposited and paid checks outstanding.

As a trading term, the average daily float is a measure of the liquid market for a company's stock. If a company is closely held and only a small portion of the stock is trading in the public markets, it will affect the bid/ask spread and a number of other aspects of how the stock is valued.

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RELATED FAQS
  1. What exactly is a company's float?

    The term "float" refers to the regular shares that a company has issued to the public that are available for investors to ... Read Answer >>
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    Understanding share counts, including outstanding shares relative to float, is an integral part of determining whether or ... Read Answer >>
  3. What is the difference between shares outstanding and floating stock?

    Learn about shares outstanding, floating stock, how to calculate a company's floating stock and the difference between shares ... Read Answer >>
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    Find out about float, which may become a thing of the past due to the steady decline of check writing and new services in ... Read Answer >>
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    Find out more about floating stock, outstanding shares and restricted stock, and learn how to calculate the amount of a company's ... Read Answer >>
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