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Restricted stock

Shares issued with resale limits, usually from employee grants or private placements, that cannot be freely sold until conditions are met.

Restricted shares exist but cannot be sold on the open market until a vesting condition or a holding period is satisfied and the legend is removed. They are counted in outstanding-shares but excluded from float, which is why float is smaller than the share count.

For traders the important moment is when restrictions lapse. A lock-up-period expiry or a large tranche of registered restricted shares adds supply on a known date, and form-144 filings flag intended sales.

Example: a company has 80M shares outstanding of which 26M are restricted insider holdings. Float is 54M. When 9M shares unlock, float jumps 17% in a day and the typical daily volume of 1.2M shares suddenly looks thin against the new supply.

Related: float, rsu

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