Buying Power Calculator

Find Out How Much You Can Invest or Trade

Use this calculator to determine your total and leveraged buying power based on your available cash, margin value, open positions, and leverage ratio. Perfect for investors, traders, and anyone managing a margin account.

Buying Power Examples

See how buying power is calculated in different scenarios.

Simple Cash Account

basic

You have $10,000 cash, no margin, no open positions, and no leverage.

Cash: $10,000.00

Leverage Ratio: 1x

Margin Account with Leverage

margin

You have $5,000 cash, $5,000 margin, no open positions, and 2x leverage.

Cash: $5,000.00

Margin Value: $5,000.00

Leverage Ratio: 2x

Account with Open Positions

openPositions

You have $8,000 cash, $2,000 margin, $3,000 in open positions, and 1.5x leverage.

Cash: $8,000.00

Margin Value: $2,000.00

Open Positions: $3,000.00

Leverage Ratio: 1.5x

Multi-Currency Example

multiCurrency

You have €7,000 cash, €2,000 margin, €1,000 open positions, and 3x leverage.

Cash: €7,000.00

Margin Value: €2,000.00

Open Positions: €1,000.00

Leverage Ratio: 3x

Other Titles
Understanding Buying Power Calculator: A Comprehensive Guide
Everything you need to know about maximizing your investment potential.

What is Buying Power?

  • Definition of Buying Power
  • Importance in Trading and Investing
  • How Margin and Leverage Affect Buying Power
Buying power is the total amount of capital you can use to purchase securities or make investments. It includes your cash, margin, and the effect of leverage.
Buying Power in Margin Accounts

Buying Power Examples

  • If you have $10,000 cash and 2x leverage, your buying power is $20,000.
  • With $5,000 cash and $5,000 margin, your buying power is $10,000 without leverage.

Step-by-Step Guide to Using the Buying Power Calculator

  • Input Your Cash and Margin
  • Add Open Positions
  • Select Leverage Ratio and Currency
Start by entering your available cash and any margin value. Add the value of your open positions, select your leverage ratio, and choose your currency. The calculator will instantly show your total and leveraged buying power.
Quick and Accurate Results

Step-by-Step Examples

  • Enter $8,000 cash, $2,000 margin, $3,000 open positions, and 1.5x leverage to see your buying power.
  • Try different leverage ratios to see how your buying power changes.

Real-World Applications of Buying Power

  • Stock Market Trading
  • Forex and Derivatives
  • Personal Financial Planning
Buying power is crucial for traders and investors to understand their maximum investment capacity. It helps in risk management and planning future trades.
Practical Use Cases

Real-World Examples

  • A trader uses buying power to determine the size of a new position.
  • An investor checks available margin before making a large purchase.

Common Misconceptions and Correct Methods

  • Buying Power vs. Account Balance
  • Leverage Risks
  • Margin Calls and Liquidation
Many confuse buying power with account balance. Buying power includes leverage and margin, while account balance is just your cash. Misusing leverage can lead to margin calls and forced liquidation.
Avoiding Costly Mistakes

Misconceptions Examples

  • Using high leverage without understanding risks can result in losses.
  • Always monitor your open positions to avoid margin calls.

Mathematical Derivation and Examples

  • Buying Power Formula
  • Leverage Calculation
  • Margin and Open Positions
The buying power formula is: (Cash + Margin Value) × Leverage Ratio - Open Positions. This formula helps you quickly determine your maximum investment potential.
Calculation Examples

Mathematical Examples

  • With $5,000 cash, $5,000 margin, and 2x leverage, buying power is ($5,000 + $5,000) × 2 = $20,000.
  • Subtract $3,000 open positions: $20,000 - $3,000 = $17,000 buying power.