Investing in stocks has garnered the interest of many people in the modern age and the advent of online trading platforms has increased its prevalence. Stock markets, however, are subject to risks and if you’re investing in the same without prior knowledge and proper research, it can certainly be risky. Understanding the jargon common in the sphere is highly important and one such term is buying power. If you want to learn more about interactive brokers buying power and know the best things about it, this guide can give helpful insight.
What Is Buying Power?
Buying power refers to the total sum of money posed by an investor which he or she can use to purchase stocks and securities. This amount also includes the sum required to invest in stocks via Margin Trading Facility (MTF). Therefore, buying power, in its totality can be considered as the total investment amount available in both your bank and MFT account. However, it is important to note that you must have a margin trading account established at your broking firm if you want to avail of the Margin Trading Facility. Also, having a trading account and a Demat account is another compulsion. In the trading sphere, buying power can simply be termed excess equity which relates to the availability for an investor to purchase securities. An investor can get two times equity in buying power through a standard margin account.
What Is A Trading Platform?
If you are wondering what is a trading platform then it is software that is used for digital trading. It can be used to open, close, and manage market positions through the assistance of an online broker or any other financial intermediary. There are several online trading platforms that people can access for free or at a discounted rate. However, they have to complete a specific number of trades per month or manage a funded account in exchange for the same. Through trading platforms, traders and investors can monitor their accounts and place trades as well through brokers and financial intermediaries. Many trading platforms are accompanied by various other features as well like charting tools, premium research, real-time quotes, and a news feed. Several platforms can also be customized as per specific markets like currencies, futures, options, and stocks market.
Trading platforms can be categorized into two main types which are commercial platforms and prop platforms.
- Commercial platforms: Commercial platforms are trading platforms for retail investors and day traders. They are easy to use and facilitate a host of handy features such as charts and news feeds which is useful for investor research and education.
- Prop platforms: Prop platforms are trading platforms that can be customized. They are developed by large brokerages according to their preference so that the platform can meet their requirements and suit their trading style.
6 Best Interactive Brokers Buying Power Things
When it comes to offering brokerage services, Interactive Brokers is known to have a streamlined approach that lays stress on excellent trade execution, broad market access, and low costs. Being one of the best international trading brokers and an advanced trading platform, here are the six best things about Interactive Brokers buying power.
- Interactive Brokers facilitate a plethora of tools and give professional traders access to a global range of assets. Investors with good buying power only need to have a single integrated account to trade futures, funds, bonds, stocks, and options across 135 markets.
- Interactive Brokers gives traders access to the “SmartRouting” software which makes clients aware of the best price execution in the sphere. It researches the best firm option, combination, and stock prices which are executed instantly when you place an order.
- Trader Workstation (TWS) platform by IBKR is particularly designed for professional traders, retail traders, and investors which gives them access to a wide range of technical analysis tools, ESG scores through Refinitiv, and Social Sentiment by Social Market Analytics.
- Interactive Brokers is one of the best professional trading platforms that allow you to calculate margin, balances, and buying power in real-time. The internal return rate can be calculated in real-time as well.
- Fundamentals Explorer gives them access to company fundamentals data on mutual funds and stocks. The interest rates of Interactive Brokers are also highly lower as compared to the average rates in the industry.
- You can also use the Trader’s Journal by IBKR TWS which facilitates a note-taking feature. You can record trading notes and ideas and save the same as screenshots as well.
Final Thoughts
When it comes to the wide variety of tools and technologies you can access for online trading, there is no denying that interactive broker after hour trading is a feasible platform. With a single integrated account, you can access a lot of conveniences and take your trading dreams forward.