Buying Power

Buying power is the total notional value of positions a trader can hold open at any moment. It is typically a multiple of the cash account balance, with the multiplier determined by the firm's leverage rules and the asset class being traded.

The multiplier varies by asset class and time of day. Forex evaluation accounts commonly extend 30:1 to 100:1 leverage. Futures buying power is determined by exchange-mandated initial margin, with prop firms often allowing trading at reduced day-trading margins (e.g. 25% of overnight margin). Equity prop firms typically allow 4:1 intraday and 2:1 overnight under FINRA rules.

For first-loss / leveraged-trader-capital model firms, buying power can run substantially higher because the trader's deposit absorbs initial losses. Multipliers of 10x–30x the trader deposit are common in this model.

Practical implication: buying power is not the same as risk budget. A $50k futures account with $200k of intraday buying power can take positions large enough to breach the daily loss limit on a single 0.5% adverse move. Position sizing should always be governed by drawdown rules first, buying power second.