Exposure in the stock market measures the potential loss or the total amount of money and assets invested in a particular sector of the market or industry. It encompasses all buy and sell trades that have not yet been settled in the Cash segment. The profit and/or loss on these trades are yet to be determined and settled on the closed positions. This definition extends to include Futures and Options as well.
In financial terms, Exposure represents the total amount a trader may lose if a trade fails. It serves as a measure of potential loss, encompassing the sum total of the amount invested, liabilities such as loans, and outstanding settlements.