1. What is Stock Buying Power?

Stock Buying Power represents the total amount of funds available to purchase securities in a margin account. It combines your cash balance with the margin borrowing power provided by your broker.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Cash \) — The cash balance in your trading account (USD)
• \( Margin \) — The margin amount approved by your broker (USD)

Explanation: This calculation shows your total purchasing power when combining your own funds with borrowed funds from your broker.

3. Importance of Buying Power Calculation

Details: Understanding your buying power helps you make informed investment decisions while staying within your financial limits and margin requirements.

4. Using the Calculator

Tips: Enter your available cash balance and approved margin amount in USD. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is buying power the same as account value?
A: No, account value is your total holdings, while buying power is what you can use to make new purchases.

Q2: How is margin determined?
A: Margin limits are set by brokers based on your account equity, portfolio risk, and regulatory requirements.

Q3: Can buying power change?
A: Yes, it fluctuates with market movements, deposits/withdrawals, and changes in margin requirements.

Q4: Are there risks with using margin?
A: Yes, margin trading amplifies both gains and losses, and you may face margin calls if positions move against you.

Q5: Do all accounts have margin?
A: No, you need a margin-approved account. Cash accounts have buying power equal to their settled cash balance.