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Comment by jibalt

12 hours ago

Without it, capital would be trapped indefinitely.

This is not necessarily true, you could have contracts rather than money down

  • Sure, but in most (all?) financial settings, this would still count as exposure.

    It doesn’t matter if I bet $N on something using cash or margin, my exposure is still $N.

    Since you can’t have unlimited exposure, this would still lock up capital, until the bet can be resolved.