Buying Power

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DEFINITION

The money an investor has available to buy securities. In a margin account, the buying power is the total cash held in the brokerage account plus maximum margin available.

Also referred to as "excess equity."

INVESTOPEDIA EXPLAINS

For example, if you have $1,000 cash in a margin account and the maximum margin rate is 50%, then your total buying power is $2,000. For a non-margin account, the buying power is equal to the amount of cash in the account.


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