New Floats

A company's float refers to the number of shares that company has available for trading on a stock exchange. A new float is when a company decides to issue more shares or list on the stock exchange for the first time. Upcoming floats are constantly updated on the ASX's website, and it's important to understand company floats when investing in shares.

The number of shares a company floats on an exchange can have an effect on the price and volatility of shares. The more shares a company floats, the less volatile the share prices will be on the overall share market. Obviously, the larger companies will normally have more shares available for trade on the stock market.

Companies may also have restricted shares that are not counted in the float because they cannot be traded. For example, these could be shares issued to employees under a contract where the shares are restricted on the market. Upcoming floats can affect the market and share prices, so it's important to keep an eye on new floats.

Stock brokers can help you capitalise on new floats, but this is one circumstance you do not need a stock broker to purchase shares. According to ASIC, when a company is about to issue shares on the ASX, you can simply send them a cheque to purchase shares. You will find out specific instructions and how many shares you have been allocated from the company itself, and you can then either elect to have the shares listed on the Issuer Sponsored Sub Register or you can enter into a broker agreement using the CHESS system.

As with all investments, it is important to research and understand the risks and rewards, and if there is any confusion or doubt, speak to a stock broker or financial professional about new floats.