Buying Power

Discussion in 'Options' started by wardog1, Feb 15, 2011.

  1. wardog1


    I currently trade with a broker/firm/custodian that allows me 2:1 overnight buying power. Is there any way or any firm in which I could get more overnight buying power (not on portfolio margin.) Thanks for any input.
    P.S. I trade options only
  2. stoic


    Buying power is based on SMA or Maintenance Excess. Buying Power is derived by the lesser of:

    Buying power derived from SMA.
    Buying power derived from Maintenance Excess.
    Minimum Equity.

    The current account buying power based on which component SMA or Maintenance Excess returns the lesser value. Buying power expressed in dollars represents the total amount available for new purchases, short sales and/or new commitments that meet the same requirements of charge and release that the system uses to calculate buying power.

    Since Options that expire in less than 9 months are not marginable, Options are to be paid in full.

    New account commitments represent a charge to SMA (Reg. T) and an increase to the account Maintenance Requirement. SMA represents an amount available to meet the Initial requirement. Maintenance Excess represents the amount available to meet the House or firms requirements.

    Any account not under CPM, must meet all Reg. T requirements and house requirements that are normally set above Exchange minimums.

    You will not find a B/D that violates Reg. T or Exchange requirements.
    (if you did, it would not be somebody I'd want to deal with)