Instant Buying Power
| Instant Buying Power is a good faith system used by brokerage firms to grant users a limited amount of credit during the transfer settlement period. This system is beneficial because it allows users to buy securities before the actual settlement period. However, there are some drawbacks to using Instant Buying Power. One potential drawback is that the user may not have enough money to cover the entire purchase price of the security. In this case, the user would be responsible for paying the difference between the purchase price and the amount of credit extended by the brokerage firm. Another potential drawback is that the user may not be able to sell the security during the settlement period. This could result in a loss if the security's price decreases during that time. |
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