buying power

kasun333 · 1 buying power Wed Jun 15, 2011 11:24 am

kasun333

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what is buying power plz explain me.

cOrE · 2 Re: buying power Wed Jun 15, 2011 12:20 pm

cOrE

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As far as I know it is the money an investor has available to buy securities...

For example, if you have a portfolio value of 1,000 in your account and the buying power rate is 50% allowed by your broker, then your total buying power is 500 plus any cash balance available in your account.This 500 is a temperory loan sort of thing which does not charge you any interest if you pay for your purchases with in T + 3 days...

Light of Hope · 3 Re: buying power Wed Jun 15, 2011 2:59 pm

Light of Hope

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it's the amount you have to buy stocks. this will include your money, plus what the broker is giving you on credit (usually 50% of your amount).

rijayasooriya · 4 Re: buying power Wed Jun 15, 2011 3:39 pm

rijayasooriya

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kasun333 wrote:what is buying power plz explain me.

The amount of money that u can spend to buy shares.
Ex:If u put 100,000 to the market at the begining,
Ur buying power is 100,000+amount of credit that ur broker gives u(usually it is 50% of ur portfolio)

So ur actual buying power is 150,000/=

Fresher · 5 Re: buying power Wed Jun 15, 2011 3:58 pm

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if you deposit 100,000 with broker, initially your buying power is 100,000/-
as you buy shares you get credit.

when you have bought 50k worth of shares your buying power is 50k cash balance + 50% (generally) of your 50k portfolio = 75k
when you have bought shares worth 100,000/- you will have 50,000/- as credit as buying power.
when you have shares for 150k you have 0 buying power and you have to settle the credit within 5 days.

This is my understanding.

mark · 6 Re: buying power Wed Jun 15, 2011 4:30 pm

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when giving buying power against your portfolio,they consider the liquidity of your shares and weighted the portfolio,then give you that value plus cash amount.