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Buying Power

In short

Available funds to place new trades — cash plus margin capacity

Buying power is how much you can trade with right now. In a cash account, it's your available cash. In a margin account, it can be 2× your cash because the broker lends you money to buy more.

Buying power represents available capital for new positions. In a cash account it equals uninvested cash. In margin accounts, it's typically 2× the cash balance (RegT) for overnight holds and up to 4× intraday (pattern day traders). Exceeding it causes a margin call.

Related concepts

  • Market Order — A market order says 'buy this stock right now at whatever price it's selling for.' You get filled immediately but might pay slightly more than you expected, especially for less liquid stocks.
  • Fractional Shares — A share of a high-priced stock can cost several hundred or several thousand dollars. Fractional-share trading lets an order be sized in dollars instead of whole shares — $100 of a $1,000 stock buys one-tenth of a share — making it possible to fully invest a fixed budget regardless of what a single share costs.
  • Order Status — After placing an order, it goes through stages: pending (just submitted), open (waiting to fill), partial (partly filled), filled (complete), or cancelled. You can monitor these in your order history.
  • Paper Trading — Paper trading lets you practice investing with imaginary money. All the real market data, all the real mechanics, but no real money at stake. Perfect for testing strategies before risking your actual savings.