I've contacted IB about this and I'm not sure the agent gave me the correct answer. Let's say I have an account with $50K, the agent said my buying power doesn't decrease after initiating a position and liquidating that position. He said I don't have to wait three days. Is this correct? If so, I can make unlimited amount of trades in a day? That's what the agent said.
IB Buying Power
- Thread starter ecfan
- Start date
I know what PDT is. My question is will the buying power decrease. Example:
Account is 50K, leverage is 200K, let's say I initiate & liquidate a position for 20K. So, my understanding is the buying power now is 180K and it doesn't reset until after three days. The agent is saying my buying power will be reset back to 200K. So which is correct?
Account is 50K, leverage is 200K, let's say I initiate & liquidate a position for 20K. So, my understanding is the buying power now is 180K and it doesn't reset until after three days. The agent is saying my buying power will be reset back to 200K. So which is correct?
yes.
however
this one is not true. your buying power can be all over the place,depends on what you trade and margin requirements for it. i trade baskets of stocks(short,long,big,small-whatever) and many times i've noticed that. example-my buying power is 70K on account,where i'm holding some securities already. i short and long bunch of stocks on roughly 30K-buying power gone. i have zero. this is because of high initial margin requirements on certain products.(margin requirements can be found on their site for each security)
hope this helps.
to simplify...
PDT allows you to borrow intraday 4x your account...
$50K => $200K Notional
If you buy $100K @ 10AM, your buying power avail will be $100K
If you sell $101K @ 11AM, your buying power avail is $204K (profit)
if you sold $99K @ 11AM, your buying power avail is $196K (lost)
basically, your buying power changes as you open and close positions... make sure not to go overnight on 4x and also, make sure that you dont go over the opening day buying power, or else you will incur a margin call that will need to be met even if you are flat @ end of day...
PDT allows you to borrow intraday 4x your account...
$50K => $200K Notional
If you buy $100K @ 10AM, your buying power avail will be $100K
If you sell $101K @ 11AM, your buying power avail is $204K (profit)
if you sold $99K @ 11AM, your buying power avail is $196K (lost)
basically, your buying power changes as you open and close positions... make sure not to go overnight on 4x and also, make sure that you dont go over the opening day buying power, or else you will incur a margin call that will need to be met even if you are flat @ end of day...