Why do markets allow leverage and day trading

@nithin I always wonder why the exchanges allow day trading in equities.Also what do the leverage regulations depend on?I earlier read a post on the FINRA rules in the USA where they do not provide as much leverage as in india.
Are the levrage rules actualy loopholes that brokers exploit is there ay benifit per se that leverage provides to the exchanges.
How are derivatives inherently leveraged when they are actually a risk management mechanism.

Intraday leverage is a common thing across all exchanges around the world. In the US also it is allowed, but it isn’t allowed to everyone. If you trade intraday for more than 5 times a week, you get classified as a pattern day trader, and only clients above a certain size in terms of account value can be a pattern day trader.

In India SEBI is now plugging in the loophole which allowed brokers to offer almost unlimited leverage if they wanted. Check this thread

About derivatives, I didn’t get the question.

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