If I buy a derivative contract, what is the reason for paying exposure margin when I am already paying SPAN?

[nithin]

@Ankit_Jain3

@nithin its a win win for all, exchanges, SEBI, brokers, traders to get rid of this margin, more revenue for all . trading is a risky game. if one is not ready, dont get into it. we all traders understand this; risk = profit.
cant we take it up again with the new SEBI chief.

It isn’t really a win-win for all, the risk goes up significantly. Check this post.

The superiority of spreads and their absolutely dismal state

Exposure margin is an additional margin charged on top of SPAN margin for the purpose of risk management. And it probably makes sense for unlimited risk products such as naked futures and naked short options but those are not popular amongst retail traders now because of the heavy margins associated with them. Most traders seem to have moved to option buying which does excite them as it is a limited risk and unlimited profit product. And because of this shift in product choice to a limited risk …