If smooth sailing on the stock market's seas sounds boring to you, and you crave companies full of stormy ups and downs, stocks with small floats might be just what you're looking for. Personally, though, I think you're better off without them.

First, a few definitions
To understand "float," we need to first understand the concept of outstanding shares -- the total number of shares a company has issued. Among other things, the number of shares outstanding can be multiplied by a company's current price to calculate its market cap, as the following examples show:

Company

Recent Price

Shares Outstanding

Market Capitalization

Toyota (NYSE:TM)

$87.71

1.57 billion

$137.7 billion

Occidental Petroleum (NYSE:OXY)

$77.65

812 million

$63.1 billion

U.S. Steel (NYSE:X)

$56.23

143 million

$8.0 billion

Palm (NASDAQ:PALM)

$11.57

168 million

$1.9 billion

Data: Yahoo! Finance.

But not all of a company's outstanding shares can be freely traded on any given day. Some are restricted, while others may be held by company insiders. Whatever's left over -- owned by the public and available for trading -- is referred to as a company's "float."

As you can see by the chart below, some companies' float comprises a majority of their shares, while others have less than half of their outstanding shares available for trading:

Company

Shares Outstanding

Float

Percentage of Shares in Float

Tyco (NYSE:TYC)

474.7 million

473.4 million

~100%

Sprint Nextel (NYSE:S)

2.88 billion

2.87 billion

~100%

Coca-Cola (NYSE:KO)

2.32 billion

2.20 billion

95%

Google

317.2 million

246.2 million

78%

1-800Flowers.com

63.5 million

25.7 million

40%

Heelys

27.6 million

10.9 million

39%

Data: Yahoo! Finance.

The fewer shares a company has available, the more powerfully the forces of supply and demand can work upon it. Stocks with tinier floats -- most often issued by smaller companies -- can experience wild price swings, and they're also more prone to short squeezes, which can really ramp up shares' volatility.

Those who like to gamble on stocks enjoy these huge ups and downs, and try to time their trades accordingly. Those who'd rather invest in more stable enterprises should steer clear.

Longtime Fool contributor Selena Maranjian owns shares of Coca-Cola and Google. Coca-Cola and Sprint Nextel are Motley Fool Inside Value selections. Google is a Motley Fool Rule Breakers choice. Coca-Cola is a Motley Fool Income Investor recommendation. Try any of our investing newsletters free for 30 days. The Motley Fool is Fools writing for Fools.