The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again at Option Alpha and welcome back to the daily call. Today, we’re going to be answering the question, “What is option buying power?” In its most simple terms, option buying power is the amount of money or funds that is available for you to actually go out and start trading options. Now, I think this terminology should be switched and it should no longer be called option buying power, but actually be called option trading power because it's not just limited to the buying and purchasing of option contracts. Your option buying power just tells you how much funds you have available in your account for the purposes of options trading and this means that you can also sell option contracts and put option contracts on margin or sell spreads, buy spreads, you can sell complex strategies. You could do everything you want with options trading with this amount of capital. What typically happens is that when you have an account say $100,000, if you start investing that account and you