Simple English definitions for legal terms
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Float refers to the delay between a transaction and the withdrawal of funds to cover the transaction. It can also mean the amount of a corporation's shares that are available for trading on the securities market. Additionally, float can refer to the sum of money represented by outstanding or uncollected checks. This creates an artificial balance due to delays in processing credits and debits to an account.
Definition: Float refers to the delay between a transaction and the withdrawal of funds to cover the transaction. It can also refer to the sum of money represented by outstanding or uncollected checks. For example, if you deposit a check, it may take a few days for the funds to become available in your account. During this time, the check is said to be "in float."
Float can also refer to the amount of a corporation's shares that are available for trading on the securities market. For example, if a company has 1 million shares outstanding, but only 500,000 are available for trading, the float is 500,000.
Additionally, float can be used as a verb. To float a security means to issue it for sale on the market. For example, a company may float a new series of preferred shares to raise capital.