3x US Mag 7 DLCs Expiring Soon: What Happens At Expiry?
If you've been trading the US Stock DLCs, you may have noticed that the first batch of US 3x Magnificent 7 DLCs listed in 2024 will soon be expiring on the 6th of October.
Investors who wish to maintain leveraged or inverse exposure to these underlyings may consider alternative DLCs offering up to 5x exposure and later expiry dates here.
🔍 What happens to a DLC close to expiry and upon expiry?
A DLC will stop trading five business days before its Expiry Date. This is known as the Last Trading Date. After this date, investors will no longer be able to buy or sell the DLC.
However, between the Last Trading Date and the Valuation Date, the DLC will continue to track the daily percentage performance of its underlying asset based on its fixed leverage factor. The Valuation Date is typically one business day before the Expiry Date.
Following the Expiry Date, the DLC will be delisted. Investors who hold the DLC until expiry will receive a cash settlement, if any, based on its fair intrinsic value on the Valuation Date.
Investors who hold the DLC beyond its Last Trading Date will no longer be able to exit their positions but will remain exposed to leveraged movements in the underlying until the Valuation Date.
Any cash settlement will be paid on Settlement Date which is typically no later than five business days after the Expiry Date. Investors should refer to the DLC’s Listing Documents on our website for the exact dates.
Example
Assuming for a certain DLC,
• Last Trading Date: 29 September (Tuesday)
• Valuation Date: 5 October (Monday)
• Expiry Date: 6 October (Tuesday)
• Settlement Date: No later than 13 October
• Intrinsic Close on 29 Sept = SGD 0.2
• Intrinsic Close on 5 Oct = SGD 0.25
The DLC above will stop trading on 29 Sept, cease to exist after 6 October, and the cash settlement of SGD 0.25 per unit of DLC will be paid out to investors by 13 October.
To see the Cash Settlement Amount for a DLC that has expired, investors can refer to SG DLC website here.
This advertisement has not been reviewed by the Monetary Authority of Singapore. This advertisement is distributed by Société Générale, Singapore Branch. This advertisement does not form part of any offer or invitation to buy or sell any daily leverage certificates (the “DLCs”), and nothing herein should be considered as financial advice or recommendation. The price may rise and fall in value rapidly and holders may lose all of their investment. Any past performance is not indicative of future performance. Investments in DLCs carry significant risks, please see dlc.socgen.com for further information and relevant risks. The DLCs are for specified investment products (SIP) qualified investors only.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
