In around two minutes you will know what is Buying Power. You will get both professional definition and easy explanation. No intro, no outro, straight to the point.

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Buying Power is the amount of money available for purchasing securities right away without the need to deposit additional funds.

Buying power is increased in margin accounts. And if you are not sure what margin means, feel free to watch one of my previous videos.

In very basic understanding, buying power is cash in your brokerage account that is not invested in securities.

Let’s say, you deposited $1000. Your buying power is $1000. Then you bought some shares for $400. After the transaction has been settled, your buying power decreases to $600.

If you sell $100 worth of shares that you bought in the past, your buying power will increase from $600 to $700.

But margin accounts allow you to have higher buying power. If you have the same $1000 deposited into 2 to 1 margin account, your total buying power is increased to $2000.

You become twice leveraged. Meaning that you can magnify your potential earnings, but your losses are amplified as well.

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*None of this is meant to be construed as investment advice, it's for entertainment purposes only. Links above include affiliate commission or referrals. I'm part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.

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