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Buying power

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Buying Power Index (B.P.I.)
A composite indicator of consumer demand in specific cities, counties, and metro areas. Published annually by Sales and Marketing Management magazine, the B.P.I.


Buying power refers to the amount of money you have available in your account to buy equities. When you buy equities your buying power goes down. When you sell equities your buying power goes up.

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Trading Dictionary Terms and definitions for active trading, forex, futures, stocks, and options
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Buying Power Variables
Buying power is rarely constant in the investing world. The number fluctuates from day to day based on market conditions, world economics and investor margins. EquityScholar.

Money Management and Buying Power
Arbitrary Number of Stocks
A first money-management method would be to trade in a limited number of stocks out of an unlimited list of stocks.

Buying Power:
The amount of money available to buy securities. This is determined by the sum of the cash held in the brokerage account and the loan value of marginable securities.

Buying Power
In a margin account, the maximum dollar amount of marginable securities that the client can purchase or sell short without having to deposit additional funds.

Buying Power
Amount of credit available to a client in a brokerage account for the purchase of additional securities and is determined by the dollar amount of securities that can be margined.
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Buying power: In a margin account, the dollar amount of securities the customer may purchase without making a cash deposit. The buying power in an account is a function of the SMA (which see).

Buying power
The amount of money available to buy securities, determined by adding the total cash held in brokerage accounts and the amount that could be spent if securities were margined to the limit.

With more buying power, you can increase your total return on investment with less cash outlay. But be careful, trading on margin magnifies your profits AND losses.
Margin Call ...

Next post: Buying Power - Overnight & Day Trading

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Day Trading Buying Power[edit]
The rule increases day trading buying power to up to 4 times a pattern day trader's maintenance margin excess.

It compares the buying power with the selling power in relation to the opening price. If the price moves higher, the buying power tends to weaken and vice versa.
Normal Value Ranges ...

Option Buying Power Calculated based upon account equity less any requirements and pending purchases.

Buy them back Buy write Buy-and-hold strategy Buy-and-write strategy Buyback Buydown Buyer credit Buyer's market Buyers/sellers on balance Buyin management buyout (BIMBO) Buying climax Buying power ...

The dollar's bottom line is not against gold, but instead the buying power of a good life here within our borders. So long as the world is seeking to break into our land of opportunity, the dollar will remain a powerhouse of currency everywhere.

Margin: A margin account can have more buying power than the cash value of the account alone. A margin account is generally necessary to trade option spreads or naked option positions.

Following the surge, which uses up a lot of buying power, the number of those buyers willing to keep buying at these high (-inflated) prices becomes exhausted.

chance that you won't get your money back); market risk (the chance that interest rates will soar, reducing the value of your dividends as well as of your bond); and inflation risk (the chance that rising price levels will erode the buying power of ...

Buying stocks on margin allows you to double your buying power by borrowing up to 50% of a stock's price. You borrow this from your online broker and there are of course costs associated with this doing.

Whenever the account value rose, King Midas used the extra buying power of the account to purchase more stocks, either adding to existing positions, or starting new positions.
Short-term trades: Very high turnover, but not daytrading.

but to preserve the wealth they have already accumulated by taking what we call "intelligent risks" to achieve reasonable returns that can simply outpace moderately rising inflation and/or the devaluation and loss of the greenback's buying power .

On UpDown, if you're holding short positions, you might receive a margin call if your buying power falls below -$10,000.

In theory, support is the price level at which demand (buying power) is strong enough to prevent the price from declining further.

Trading currencies on margin lets you increase your buying power. Here's a simplified example: If you have $2,000 cash in a margin account that allows 100:1 leverage, you could purchase up to $200, ...

The sharp observer will note that the 25 percent maintenance margin requires the same level of equity as the four times day trading buying power.

Consumer Price index has high relevance due to the amount of inflationary pressure it applies to consumer's buying power. When the price of goods in this basket rises, it erodes the value of the local currency.

Annual inflation reduces your buying power. In recent years, the U.S. Government reports a 3% annual inflation rate. The business community doubles it, so that it better reflects the actual rise in living costs.

As mentioned above, trading on forex margin gives you more buying power and the potential for more profits or losses. How this works is; a 1% margin trading forex account allows you to control a position size of $100,000 with $1,000.

The only loan you should be using is with your day trading margin buying power. Do not start or continue to day trade, if you have to take out loans, credit, or use part of your retirement to get in the game.

You are expected to use half of your buying power in setting both forex trades. This enables you to enter a hedge when instance 4 and 5 above occurs.
Never wait for price to cut X 1 or X 3 and use all your buying power .

A CPI that continues to trend upwards month over month could be a signal that inflation is eroding buying power to the point that the Central Bank will raise interest rates to curb spending.

TeenAnalyst Advice: Having all your money in cash for a long period of time isn't a good idea because inflation will eat away at your buying power. However, it's important to have access to some cash at all times for emergencies.

Leverage - Leverage refers to the increased buying power available in margin accounts. Leverage allows traders to enter larger positions than could be afforded with the money in a trading account alone. Leverage magnifies both profits and losses.

In the most aggressive form of pyramiding the increased margin buying power provided by gains is used to buy more. Obviously doing so is a very aggressive strategy that can have high rewards and high risks.
Related Terms: ...

While most of the other players we are going to discuss in this lesson do not have the size and clout to move the market in their favor, many of these bank traders are an exception to this rule and can leverage their huge buying power and inside ...

With these four calculations, Lowry invented two indexes: Buying Power and Selling Pressure. He devised an ever-evolving set of rules to establish them as reliable guides to market timing.

Exhaustion
When buying power is no longer enough to move prices up or when selling power is no longer enough to move prices lower.

Using a lot of buying power on these transfers, the number of buyers who are willing to keep buying at such high prices becomes exhausted. They are not willing to pay anymore- the market has reached a critical point and the trend is for a reversal.

'This enables them to use the collective buying power of a fund to reduce charges on a small starting portfolio.

Because it takes significant buying power to break through this resistance, such an event is considered a very positive event for the stock.

Deflation usually occurs during a recession and is characterized by supply exceeding demand, and while there is increased buying power, the amount of currency in circulation is greatly reduced.

Minimum initial deposit to open an account: No minimum deposit is required to open an account, but the account must have enough buying power to pay for a trade before it is placed.

Pyramid To increase holdings that an investor has by using the most buying power available in a margin account with paper and real profits.

Because by the time they are repaid the principal loan amount, the buying power of that principal is diminished - rising commodity prices have caused an increase in the cost of finished goods.

Inflation refers to the fact that a given amount of currency will have a decrease in its buying power in the future. A given amount of money will buy less quantity of goods in the future than it will today.

Support : A price, or price zone beneath the current market line where buying power is sufficient to halt a price decline.

There are fresh longs ready to speculate, and short-sellers who don't realize they're trapped. These two forces combine to generate tremendous buying power that can trigger explosive moves.

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Inflation: Economic condition where consumer goods price increases, limiting buying power.
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Below is a quick sample margin schedule from our broker thinkorswim. Margin schedules are great to help you quickly calculate and determine if you are going to have enough buying power for a particular position or strategy.

It's possible to eliminate all possible risk of losing money (preserve capital) by placing money in a steel safe. But even under these circumstances, inflation will erode the buying power of that money over time.

What often happens is that if the interest rate increases by only half a percent per year, the actual buying power of your $10,000 at the end of 5 years may actually be only about $7,500 or so.

I have learned that new prop traders get buying power and technology from their firms but, depend on other traders when it comes to technique and strategy. I greatly-appreciate your willingness to share and help shorten the learning curve.

Not that much profit, but then he only used less than $11,000 buying power from his account. And that's exactly what a novice should be doing -- keeping trade size low -- and that's after using a simulator.

It allows traders to open positions on amounts that greatly exceed their account limits and so increase their buying power. Swissquote offers a 1% margin (or 1:100 leverage), which means you can control 100 times your deposit in the real market.

Identifying the target market is an essential step in the development of a marketing plan. A target market can be separated from the market as a whole by geography, buying power and demographics, as well as by psychographics.

At the same time, the NFP numbers can also measure whether inflation is on the rise or not in the economy. A rise of inflation would obviously be of interest to traders since it would mean that the national currency has less buying power and would ...

However, the risk of this type of money supply involves inflation. When a currency is debased like this it can result in high levels of inflation which causes us to reduce our buying power on goods and services.

bank account ten years ago and you never touched it, maybe you would have $10,500 today. Would $10,500 buy you the same amount of goods or services that $10,000 would have bought you ten years ago? In other words, would it have the same buying power?

in response to a number of factors-changes in supply and demand for credit, fiscal policy, exchange rates, economic conditions, and crucial for the bond market, changes in expectations of inflation. High inflation reduces the future buying power of ...

To learn about the I bond purchase limits and how to maximize your total buying power, take a few moments to read this overview. What is the maximum amount of Series I savings bonds I can buy each year? ...

Although deflation seems to increase your buying power in its early stages, it is generally considered a negative economic trend. That's because it is typically accompanied by rising unemployment, falling production, and limited investment.

These two sharp advances with relatively heavy volume have exhausted the buying power in the stock. Without that power behind it, the stock reverses its upward movement and falls into a downward trend.

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They also ignore the subtle deterioration in the quality of spending choices due to the shift of buying power from people who have demonstrated a superior ability to invest or produce (creditors) to those who have demonstrated primarily a superior ...

See also: See also: Market, Trading, Stock, Investor, Profit

Stock market  Buying on margin  Buying Puts

 
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