Definition

Buying Power

Meaning ⎊ The total value of assets a trader can control based on their available capital and permitted leverage.
Greeks.liveMarch 17, 2026

Buying Power

Buying power represents the total value of assets a trader can purchase or control with the capital currently available in their account, including the effect of leverage. It is a critical metric that defines the limits of a trader's ability to enter new positions or add to existing ones.

Buying power is calculated by taking the account's cash balance plus the value of existing holdings and applying the applicable leverage ratios. When a trader opens a position, their buying power is reduced by the amount of initial margin required for that trade.

It is a dynamic value that fluctuates with the market value of the trader's holdings and their open positions. Monitoring buying power is essential for avoiding accidental over-extension and ensuring that there is always room to manage existing trades.

It is a measure of the trader's financial capacity within the exchange's ecosystem. Proper management of buying power is necessary for disciplined trading and long-term success.

It is the practical expression of a trader's capital constraints.

Deposits
Support
Bull Put Spread
Margin Account
Portfolio Rebalancing
Long Call
Capital Allocation
Arbitrage Trading

Glossary

Contract Specifications

Asset ⎊ Contract specifications delineate the underlying asset defining the derivative’s value, crucial for establishing price discovery mechanisms within cryptocurrency markets.

Gamma Scalping

Strategy ⎊ Gamma scalping is an options trading strategy where a trader profits from changes in an option's delta by continuously rebalancing their position in the underlying asset.

Margin Lending

Lending ⎊ Margin lending involves providing capital to traders who wish to open leveraged positions in cryptocurrency markets or derivatives.

Option Premiums

Pricing ⎊ Option premiums represent the price paid by the buyer of an options contract to the seller, granting the right to exercise the option.

Delta Hedging

Technique ⎊ This is a dynamic risk management procedure employed by option market makers to maintain a desired level of directional exposure, typically aiming for a net delta of zero.

Slippage Control

Control ⎊ ⎊ This involves the implementation of specific trading tactics or algorithmic parameters designed to minimize the deviation between the expected execution price and the actual fill price in a volatile order book.

Stablecoin Pegs

Peg ⎊ Stablecoin pegs represent the mechanism by which a cryptocurrency maintains a stable value relative to an external reference asset, typically a fiat currency like the US dollar.

Liquidation Risk

Margin ⎊ Liquidation risk represents the potential for a leveraged position to be forcibly closed by a protocol or counterparty due to the underlying asset's price movement eroding the required margin coverage.

Algorithmic Trading

Algorithm ⎊ Algorithmic trading involves the use of computer programs to execute trades based on predefined rules and market conditions.

Margin Calls

Obligation ⎊ Margin Calls represent a formal demand issued by a counterparty or protocol for a trader to deposit additional collateral into their account.