Talking about shares, what is fully diluted and shares outstanding mean?

Okay. Shares outstanding are all the shares currently available in the market. If a company issued 10 million shares, but only have 5 million in the market and kept the rest in the Treasury (in case they needed to sell them on the open market to generate capital) than that 5 million on the open market are the shares outstanding.
Now, Dilluted shares are ALL the shares the company could possibly have. We talking the shares on the Open Market. So not just the ones out on the trading floors or in people's portfolios, but also the share OPTIONS that are out there. These contracts are also taken into consideration for this metric. So too are any debt securities that can be converted into shares, as well as warrants.
As an investor you wanna know what the company's fully dilluted shares amount is, because it can have a fast, dramatic impact on the share price of a company.

For example: If you have common shares in a company, and the company has some bonds out there that are callable; where the interest payment is 5.5%, and the Fed just lowered the rates to 4.0%...than you can expect a swarm of bonds being converted into shares because those bondholders know that the company is going to refinance its debt for the lower rate therefore calling in the bonds outstanding.

Hope this helped.

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