Final answer:
Decreasing the number of outstanding shares is the action that helps reduce the size of a company's float, as it decreases the number of shares available for public trading.
Step-by-step explanation:
The term float refers to the regular shares a company has issued to the public that are available for investors to trade. This figure is derived by taking a company's outstanding shares and subtracting any restricted stock, which is stock that is under some sort of sales restriction. The reducing the size of a company's float.
The float refers to the number of shares that are available for trading by the public; the term does not refer to shares owned by insiders or major shareholders. Reducing the size of a company's float can be achieved by decreasing the number of outstanding shares.
This is generally done through methods like share buybacks or reverse stock splits. Note that authorized shares are the total shares that a company is allowed to issue as per its corporate charter, and this number is distinct from outstanding shares, which are the shares actually issued and held by shareholders. To answer the specific question, decreasing the number of outstanding shares will help to reduce the size of a company's float (option 1).