What is a public float?

The concept of public float refers specifically to the number of shares of a company's stock that are available for trading by the general public. This figure is derived from subtracting the number of restricted shares, typically those held by company insiders, executives, and other key stakeholders, from the total number of shares outstanding.

When calculating public float, it is essential to understand that shares owned by insiders are not available for public trading, which makes the distinction crucial. The public float can significantly impact a company's stock liquidity and volatility; a higher float means more shares are available for trading, which can lead to increased market activity and potentially lower price volatility.

Other options do not accurately represent the concept of public float. The total number of shares outstanding includes all shares, regardless of ownership, while shares owned by institutional investors may or may not be included in the public float calculation. Similarly, the number of shares traded on the open market refers to trading activity rather than the availability of shares for public trading. Therefore, option B correctly captures the essence of what public float is by focusing on the shares available to the general investing public.