If you have $5,000 in your account, your buying power is $5,000.

While it sounds simple, how it’s calculated depends entirely on what kind of account you’re using. 1. Cash Account Buying Power

If you put all your money into one "risky" or volatile stock, a broker might reduce your leverage, effectively lowering your buying power to protect themselves from a total wipeout. The Bottom Line

Your buying power isn't a static number. It changes based on:

Some brokers offer even higher leverage (up to 4x) for "day trading," provided you maintain a minimum balance (usually $25,000). 3. Why Buying Power Fluctuates

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In a standard cash account, your buying power is straightforward: it is the you have on hand.

If the stocks you already own drop in value, your equity decreases. Because your borrowing limit is tied to your equity, your buying power drops too.