Buying Power Definition -

: It is the total capital an investor has available to purchase securities. This is often referred to as "excess equity" and includes both your settled cash and any available credit from your broker. Story: The Tale of Two Accounts

In the world of finance, (or purchasing power) essentially measures your ability to acquire assets. Depending on whether you are at the grocery store or at a trading desk, it means something slightly different. The Two Faces of Buying Power buying power definition

Once upon a time, two neighbors, and Marcus , decided to start investing. Each had $10,000 in their savings. 1. The Safety First Approach (Cash Account) Elena opened a cash account . For her, the math was simple: Initial Cash : $10,000 : It is the total capital an investor