Buying Power, i.e. purchasing power, is the amount available to buy margin eligible securities (if approved for margin of
course). Your buy orders will always use your cash balance before using margin credit. In short, if your buy order
exceeds your cash balance a margin loan balance is created. Here's a basic formula for buying power, but it does not apply to all scenarios:
2 x (Money Market balance + (50% x marginable securities) - Loan Amount)
Important: Cash is not included in the account’s margin buying power if your Cash Sweep Preference is set to FDIC Insured Cash. If it is set to Money Market Fund, it will be included in your account’s margin buying power.
Tip: Non-marginable securities do not contribute to your buying power. Also, some margin eligible
securities may have an initial rate higher than 50%, which reduces your buying
Even if you do not have cash or currently have a margin loan balance, you may still be able to purchase additional
securities if your buying power is greater than zero.
Your buying power may move up and down as the value of your securities change throughout the day. Transactions that may change your buying power include:
- Executed buy and sell orders
- Open buy and sell orders
- Deposits and withdrawals from your Money Market sweep option
When using your buying power for a security purchase, the buy order cannot put the account into a maintenance call. Also keep in mind, your account will not have buying power if the
equity in the account drops below the minimum equity requirement.
Tip: While margin can boost an investment strategy, buying securities on margin is not for everyone. Before investing on margin, please
give the Margin Account Agreement the once over to review important risk disclosure information, and see our margin interest rates.
Important information about the FDIC Insured Cash Balance
The FDIC Insured Cash Balance is held at Capital One 360, a division of Capital One, N.A., member FDIC. The FDIC Insured Cash Balance will be eligible for FDIC insurance up to $250,000 (including interest and principal) per depositor for all aggregated deposits held at Capital One, N.A.
Important Information about this Money Market Fund
Investors should carefully consider the investment objectives, risks, charges and expenses of the Money Market Fund before investing. This and other important information is contained in the prospectus which should be read carefully before investing.
An investment in the fund is not a deposit in a bank, and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
Performance data represents past performance and does not guarantee future results.
The fund's most recent 7-day yield may be lower or higher than the figure quoted. Yield and return will vary.
Performance data and other information may be obtained by calling 1-800-888-9723 from 8 AM to 5 PM ET, Monday through Friday.
An investment in the fund is not a deposit in a bank, and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.