Glossary Term: FLOAT
Definition(s) for FLOAT:
1. ) The use of funds generated as a result of timing differences in the check-clearing system. For banks, float occurs because debits given by the Federal Reserve to a bank's reserve account for checks being cleared can be received prior to the time that the bank allows the customer who presented the check to use the funds. For depositors, float occurs because credits may be given for checks deposited or tendered for payment before the depositor's accounts are debited. This term may also refer to the number of shares in public hands and available for trading. Also called floating supply. May also mean to allow a country's currency to change freely in value against foreign currencies.
2. ) A sum of money that represents checks that are outstanding.
3. ) The number of shares outstanding of a particular common stock.
4. ) The process of publicly offering shares to investors and listing on the stockmarket. A float may involve the issue of new shares to raise more capital for the company or the sale of shares previously owned by other shareholders. Float and IPO are terms often used interchangeably.
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See Also:
ADMINISTRATIVE FLOAT, BANK FLOAT, BILLING FLOAT, CHECK-CLEARING FLOAT, COLLECTION FLOAT, DELIVERY FLOAT, DISBURSEMENT FLOAT, FED FLOAT, FLOAT ANALYSIS, INTERNAL FLOAT, MAIL FLOAT, PAYMENT PROCESSING FLOAT, REMITTANCE FLOAT, FEDERAL RESERVE FLOAT
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Fund Letters
