Why do markets allow leverage and day trading

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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