Increase Your Buying Power

 

The Buying Power in your account is the maximum purchase strength available to you at any given moment. There is no mysterious method of increasing buying power. Actions in your account create or remove available buying power.

 


Increase Your Buying Power

Your Buying Power is listed in the Balances section of both the Trade and the Portfolio sections. Buying Power (P) is the sum of your Cash (C) and Securities (S) value minus your Margin Requirement (M), the result divided by the SEC's Regulation T margin percentage (currently 50%).

 

 

As the equation illustrates, Buying Power can only be increased by increasing the value of either the Cash or the Securities in your account.

Your available buying power is also decreased by open orders that have not yet executed. Of course, if the market value of securities in your account increases, your Buying Power will also increase proportionately.

Aside from these market changes, your choices for increasing buying power reduce simply to:

 

  1. Depositing Funds
  2. Depositing Securities
  3. Converting a Cash Account into a Margin Account, or
  4. Canceling an Open Order.