Ask a momentum trader what they trade and most will answer with a setup: gap and go, first pullback. Ask what decides whether that setup is on the table today and the honest answer is the float.
Float is shares available to trade: outstanding shares minus insider, affiliate and restricted holdings. It is not market cap and it is not shares outstanding, and the difference matters most exactly where momentum traders operate. A company can have 40M shares outstanding and a 1.8M float because insiders hold the rest.
| Band | Float | What it does | Halt-prone |
|---|---|---|---|
| Nano | under 2M | Gaps hard, moves on almost no volume, exhausts fast. Gap-and-go and squeeze territory. | High |
| Low | 2 to 10M | The classic momentum band. Enough liquidity to size, little enough to run. | Medium |
| Mid | 10 to 50M | Needs genuine volume to extend. Trade the level, not the squeeze. | Low |
| Large | 50M+ | Percentage moves require real capital. Different game entirely. | Rare |
Float rotation is the number to watch
Rotation is session volume divided by float. A name that has traded 3.8× its float has turned over every available share nearly four times. That is not a liquidity statistic, it is a statement about who owns it: almost everyone holding at that point bought today.
Rotation above roughly 1× is where nano and low-float names start behaving differently from everything else: the supply that would normally absorb buying has already changed hands, and the next buyer has to pay up. It is also where halts cluster.
The practical rule
- ·Decide your band before the session, not per name. The risk, size and stop discipline are different in each.
- ·Under 2M, plan the halt before the entry. You will get one.
- ·Between 2M and 10M, rotation is your continuation signal.
- ·Above 10M, stop expecting squeeze behaviour and trade the levels.