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Daily Leverage Certificates(DLCs)

Introduction to DLCs

DLCs offer investors fixed leverage of up to 7 times of the daily performance of the underlying asset (e.g. market indices or single stocks). The basic principle is simple – if the underlying asset moves by 1% from its closing price of the previous trading day, the value of a 3x DLC will move by 3%, and that of a 7x DLC will move by 7%.


Investor Suitability

Daily Leverage Certificates (DLCs) are for investors who are willing to accept the risk of substantial losses up to the principal investment amount, possibly within a very short time frame. Investors should also have sufficient understanding of the product and should possess either a high level of knowledge or sufficient trading experience to properly evaluate and assess the product structure, associated risks, valuation, costs and expected returns. 

All investors need to be Specified Investment Products (SIP) qualified to invest in DLCs. DLCs seek to achieve short-term investment results that correspond to the daily magnified performance of the underlying asset


How to Interpret a DLC Name   

The full name of a DLC already tells a lot of information. Below examples show how to interpret an index DLC and a single stock DLC.

Index DLC: DLC SG5xShortHSI 200714  

SG

Issuer

5x

Leverage factor

Short

Long (Call) or Short (Put)

HSI

Underlying index (e.g. HSI for Hang Seng Index)

200714

Expiry date in YYMMDD


Single Stock DLC: DLC SG5xShortDBS A    

SG

Issuer

5x

Leverage factor

Short

Long (Call) or Short (Put)

DBS

Underlying stock

A

Serial number for additional issues by the same issuer with the same underlying asset, direction, and leverage factor