Trading

Buying power

The amount available in an account to purchase securities, including permitted margin where applicable.

Plain-English context

Put the definition to work.

ILLUSTRATIVE EXAMPLE

An account may display $10,000 cash buying power and a larger margin amount. The extra amount involves borrowing rules, interest and liquidation risk.

IMPORTANT DISTINCTION

Buying power is not net wealth. Margin, options and intraday permissions can increase displayed capacity without limiting loss.

Further reading and verification. Examples are hypothetical, not current quotes or recommendations. Product terms, tax treatment and market rules can change. FINRA — order types and execution

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