The float refers to the number of shares of a firm that are not held by insiders and serve as a proxy for the number of shares that are available for traders. Small float often means outsize price moves. Three examples from today,
a) PNRA with a float of 28M, of which 3M changed hands today with a price drop of $11 and change.
b) BWLD with a float of 18M with 6M in todays volume, the price popped $12.
c) CZP, the IPO du jour, 1.8M shares were offered, the volume was 11M shares , the price popped $6.3 from the offer price of $9. This one is a real pump and dump, from what I read there appear to be many, many people waiting to sell when enough suckers have been lined up.
This kind of frothy behavior is typical of bull markets. I started watching markets in the mid 1990s during the Internet bubble. There was a real buying panic then, the action these days is a bit of a buying panic but the price moves are not even close to that period. People are getting excited since the last time the NDX was above 2500 was in late 2000 (about half way through the bursting of that bubble). That said, I think we should see a bear raid fairly soon to shake dip-buyers out of their complacency.