Buying Power

Buying power (also called "purchasing power") is the total amount you can trade based on your account equity and available leverage. It represents the maximum position size you could theoretically open.

Calculating Buying Power

Buying Power = Available Margin × Maximum Leverage

Example:

• Account balance: $10,000
• Maximum leverage: 10x
• Buying power: $100,000

This means you could open positions worth up to $100,000. However, using your full buying power is extremely risky.

Buying Power in Different Markets

US Stock Margin (Reg T)

• Cash account: Buying power = cash balance (1x)
• Margin account: Buying power = 2x equity (standard)
• Portfolio margin: Buying power = up to 6.7x equity

Crypto Exchange

• Buying power = balance × selected leverage
• Changes based on leverage chosen per trade
• Not recommended to use more than 20-30% of buying power

Best Practice

Never use more than 20-30% of your buying power. This leaves buffer for:

• Adding margin to existing positions
• Absorbing unrealized losses
• Opening new opportunities