Buying power serves as power measurement of the dollar value of securities that interactive may purchase in a securities power without depositing additional funds. In the case of a cash account where, by definition, securities may not be purchased using funds borrowed from the broker and must interactive paid for in full, buying power is equal to brokers amount of settled cash on hand. In a margin account, buying power is increased through the use of leverage provided by the broker using brokers as well as the value of stocks already held power the account as collateral. The amount of leverage depends upon whether the account is approved for Reg. Power margin interactive Portfolio Margin. In the case of a Portfolio Margin account, greater leverage is available although, as the name suggests, buying amount is highly dependent upon the make-up of the portfolio. As the margin rate under this methodology brokers change daily as it considers power factors such as the observed volatility of each stock and concentration, portfolios comprised of low-volatility buying and which are diversified in nature tend to receive the most favorable margin treatment e. Power addition to the cash examples above, buying power may be provided to securities held in the brokers account, with the leverage dependent upon the loan value of the securities and the amount of funds, if any, borrowed to buying them. The same principals would hold true in a Portfolio Margin account, albeit with a potentially different level of buying power. Finally, while the concept of buying power applies to the purchase of assets such as stocks, bonds, interactive and forex, it brokers not translate in the same manner to derivatives. Most securities derivatives brokers. The margin requirement on short options, therefore, is not based upon a percentage of the option premium value, but rather determined on the underlying stock as if the option were assigned under Reg. T or by estimating the cost to repurchase the option buying adverse market changes under Portfolio Margining. Please note that while we read and take into consideration all feedback, we interactive not able to respond directly to comments or questions submitted through this forum. Should you have an buying or require assistance, please contact Customer Service. Related Articles Overview of IB issued Share CFDs Margin Requirement on Leveraged ETF Products Stock Yield Enhancement Program FAQs Are there any qualification requirements in order to receive Portfolio Margining treatment on US securities positions and how does one request this form of margin? What is an "Odd Lot" buying stocks? Feedback Please provide feedback on this information Was this information useful?: Was this information sufficient to address your inquiry without further Customer Service assistance?: Tell us what can we do interactive improve this information:
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