Definition For Buying Power

Buying power definition is the amount of money that a person or group has available to spend.

Definition for buying power. Buying power sometimes referred to as excess equity as it relates to trading stocks and options is the maximum amount of capital money available to make trades with. Purchasing power is the amount of goods and services that can be purchased with a unit of currency for example if one had taken one unit of currency to a store in the 1950s it would have been possible to buy a greater number of items than would be the case today indicating that the currency had a greater purchasing power in the 1950s. The value of money considered as. How to use buying power in a sentence.

Purchasing power definition the ability to purchase goods and services. A person s purchasing power is their ability to buy goods. For example if one has 10 000 in collateral in a margin account and the account has a maintenance level of 25 one s buying power is 40 000. Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.

An investor with a margin account has buying power if the market value of securities placed as collateral in the margin account does not drop below a predetermined level. Purchasing power is important because all else being equal. On the tastyworks trading platform option buying power can be found at the top of the platform.