Day Trading Buying Power confusion

Discussion in 'Trading' started by oilyboid, Aug 2, 2001.

  1. oilyboid

    oilyboid

    Please excuse the newbie-ness of this question but I am not sure whether Day Trading Buying Power reflects a total "dollars used" type figure or if it is a maximum figure for open positions at one time, and is therefore able to be cycled through more than once in one day. My account is with IB and they have not been able to answer my question. Please help!
     
  2. mamt8r

    mamt8r

    Oily,

    Im not with IB, but what ever your Daytrading Buying power
    is for the day, is the maximum amount you can have open at
    anyone time during the day. You can't add to your intra-day buying power.

     
  3. Fohat

    Fohat

    Oilyboid,

    The buying power/margin in IB margin account is dynamnicly calculated in realtime, hence you don't have to worry about exceeding your buying power - such an order will be rejected.

    Currently, Daytrading buying power is NOT a fixed amout that reduces with each daytrade. Your current buying power fluctuates as you open and close positions.

    The same buying power can be used multiple times during the same trading session. For example, an account with $10,000 can open and close any number of positions provided that each purchase is offset with a corresponding sale before a new purchase is initiated (sequential trading) or if
    no single purchase exceeds the account's "buying" power ( two times the maintenance margin excess).

    This will change with the implementation of the new daytrading margin rules, because they define and treat daytrading margin/buying power differently.

    Fohat
     
  4. oilyboid

    oilyboid

    mamt8r, Fohat - Thanks both for your help!