Buying Power

The money an investor has available to buy securities. In a margin account, the buying power is the total cash held in the brokerage account plus maximum margin available.

Also referred to as "Excess Equity."



For example, if you had $1000 cash in a margin account and the maximum margin rate is 50%, then your total buying power is $2000. For a non-margin account, the buying power is equal the amount of cash in the account.



Margin Trading Tutorial - Here you can learn about what margin is, how margin calls work, how leverage can have advantages, and why using margin can be risky.
Related Terms

Cash

Leverage

Margin Account

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