Investment Choices

Daily Leverage Certificates

DLCs offer you exposure to a fixed leverage of 3 to 7 times the daily performance of the underlying index.

Daily Leverage Certificates

Daily Leveraged Certificates or DLCs are a form of structured financial instruments issued by banks and traded on the securities market. DLCs offer investors a fixed leverage of 3 to 7 times of the daily performance of the underlying index, be it a rising or falling market.

The basic principle is simple – if the FTSE Straits Times Index (STI) moves by 1% from its closing price of the previous trading day, the value of the 3x STI DLC will move by 3%. DLCs seek to achieve short-term investment results that correspond to the daily magnified performance of the underlying benchmarks and need to be actively monitored on a daily basis.

DLCs have a finite lifespan and cease to exist on expiry date. At the expiry the final exercised value of the DLC is calculated and automatically paid to investors.

This product allows investors to gain fixed leveraged exposure to developed Asian market indices. This comes without the features impacting pricing for options such as implied volatility, time decay or margin calls.

Features

  • Leverage up to 7 times – DLCs offer a fixed leverage of 3 to 7 times of the daily performance of an underlying index. This means your gains could potentially be amplified – however your losses will also be enlarged.
  • Go Long or Short – DLCs offer the flexibility to trade both rising and falling markets over short periods of time, predominantly on an intra-day basis.
  • Risk Management – Low capital outlay and loss limited to invested amount.
  • Pricing Structure – No margins. No implied volatility impact. No time decay impact.
  • Transparency – Transparent pricing due to tradability of the products on exchange. Trades with a designated market maker providing liquidity.

Product Information Page

  • SGX DLC information page: sgx.com/dlc
  • SG DLC information page: dlc.socgen.com

For more information

  • Contact your Trading Representative at DBS Vickers Securities; or
  • Call our Customer Service Line at (65) 6327 2288 (SG).

Risks: This product introduction does not form part of any offer or recommendation, or have any regard to the investment objectives, financial situation or needs of any specific person. Before committing to an investment, please seek advice from a financial or other professional adviser regarding the suitability of the product for you and read the relevant product offer documents, including the risk disclosures, which can be obtained from DBS Vickers. If you do not wish to seek financial advice, please consider carefully whether the product is suitable for you.

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 timeframe. 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.

DLCs are products with features that might be more complex in nature and are only suitable for investors who possess the investment knowledge of more complex products and have a high risk tolerance. Hence, all investors need to be qualified to trade in Specified Investment Products (“SIP”) to be able to trade DLCs. Investors now have the opportunity to assess their qualifications to trade SIP or enhance their product knowledge through the SGX online portal available here. DLCs seek to achieve short-term investment results that correspond to the daily magnified performance of the underlying benchmarks.

Investors are also exposed to counterparty risks like credit and default risks of the DLCs issuer. To manage the risks, investors should keep abreast of economic and corporate developments and seek to understand the workings of such instrument and financial markets in general.