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Buying power

Stock market  Buying on margin  Buying Puts

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.


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

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Trading Dictionary Terms and definitions for active trading, forex, futures, stocks, and options
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Money Management and
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.


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: 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).


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.

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.

With more , 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 [edit]
The rule increases day trading 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 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 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 , 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 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 .

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

Trading currencies on margin lets you increase your . 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 . 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 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 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 .

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 . 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 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: and Selling Pressure. He devised an ever-evolving set of rules to establish them as reliable guides to market timing.

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.

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

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

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

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

Stock market  Buying on margin  Buying Puts

 
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