Average Daily Float
Barron's Banking Dictionary:
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Average Daily Float
Average dollar amount of checks or drafts in the process of collection, and not credited to the account as collected funds or available funds. Also referred to as items in collection.
Investopedia Financial Dictionary:
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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.
Investopedia Says:
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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Barron's Banking Dictionary
Dictionary of Banking Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.
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