Margin Accounts, Buying Power, and Loans

Margin accounts, buying power, and margin loans are the brokerage-account concepts that determine whether an investor can borrow against eligible securities, how much capacity appears available, and what happens if collateral value falls.

Use this section when the question is account-level funding rather than a trade signal. The core issue is not whether a security is attractive; it is whether the account has enough equity, eligible collateral, liquidity, and risk controls to support the position.

How The Terms Fit Together

What To Check First

Before relying on margin capacity, confirm:

• the account is approved for margin and the position is eligible for margin treatment
• the broker’s current house requirements and concentration rules
• whether the security is volatile, thinly traded, non-marginable, or subject to special requirements
• the interest rate and how the broker accrues margin interest
• what the margin agreement allows the broker to sell, restrict, or revalue

Common Misunderstanding

Buying power is not the same as spare cash. It is a live account calculation that can fall because market value drops, maintenance requirements rise, a security becomes less eligible, or the broker changes house requirements.

Related Terms

• Margin: Collateral or equity supporting a leveraged position.
• Initial Margin: Equity required to open a margin position.
• Maintenance Margin: Equity required to keep a margin position open.
• Margin Call: Broker demand to add equity or reduce exposure.
• Margin Interest: Financing cost on borrowed brokerage funds.
• Non-Marginable Securities: Securities that cannot be used the same way as eligible margin collateral.

In this section

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