Buying Power Definition at Buying

Buying Power Definition. The term buying power refers to the amount of money in your account that is readily available to allocate to new positions. Buying power reduction explained | best practices | tastytrade.

In other words, the buying power is investors' money which is on a broker's account, plus extra funds which can be obtained. Purchasing power is the amount of goods and services that can be purchased with a unit of currency. Purchasing power is the value of a currency expressed in terms of the number of goods or services that one unit of money can buy.

Stock buying power and option buying power differ, so let's start with stock buying power. Money in a margin account that an investor has available to purchase securities. Cash accounts will have buying power based on the amount of cash and excess equity in the account while margin accounts will have two times the amount of equity where traders can. Purchasing power is important because, all else being equal.