Buying Power

Available capital for opening new positions

What is Buying Power?

Buying Power The total amount of capital available for opening new positions, including cash and the margin value of existing securities. Selling options reduces buying power by the margin requirement of the position. Defined-risk strategies like spreads consume less buying power than naked options. Portfolio margin accounts have significantly more buying power than Reg T accounts.

Complete Definition

The total amount of capital available for opening new positions, including cash and the margin value of existing securities. Selling options reduces buying power by the margin requirement of the position. Defined-risk strategies like spreads consume less buying power than naked options. Portfolio margin accounts have significantly more buying power than Reg T accounts.