小虎投资狮城
2021-09-15

GEAR UP! With DLC!

@TigerTalks：
SG Active Trading Tournament 2021The Annual SG Active Trading Tournament is back! This is a special trading competition that focuses on the trading of Daily Leverage Certificates (DLCs) and consists of 2 rounds. In the Elimination Round (13 September – 1 October 2021) participants will be performing a free for all trading simulation where the Top 10 traders with the highest portfolio returns will be selected to proceed to the Final round. In the Final round, the Top 10 traders will compete against each other and the top 3 traders with the highest portfolio returns will win a prize with the top prize being S$4000! Tiger Brokers are proud to be one of the Exclusive Partners to support this Event.Rewarding clients who trade DLCFor the period of the Campaign, 13th September 2021 to 22nd October 2021 Weekly Top 15 participants who traded the most volume of DLC that are listed on SGX (in terms of total contract value) to be awarded with stock vouchers; with the Top 5 placing participants to be awarded with S$100 stock voucher each and the following 10 placing participants to receive S$50 worth of stock vouchers each. At the end of the Campaign period 13th September 2021 to 22nd October 2021 the 3 Grand Final winners will be determined by the most traded volume of DLC that are listed on SGX (in terms of total contract value) during the period of 13th September 2021 to 22nd October 2021; will be awarded with S$500, S$300 and S$200 each respectively for the First, Second and Third placing. Commission Free Trading for SGX listed DLC All Clients will receive a commission free pass for SGX listed DLC trading* on Tiger Trade platform, valid from 13th September to 22nd October 2021 (both dates inclusive). Clients are to activate the pass on their Tiger Trade app in order to enjoy the commission free trading for DLC listed on SGX. Daily Leverage Certificates (DLCs) 1. What are Daily Leverage Certificates (DLCs)? Daily Leverage Certificates (DLCs) are exchange-traded financial products that enable investors to take a leveraged exposure to an Underlying Asset, such as an equity index or a single stock. DLCs replicate the performance of an Underlying Asset versus its previous day closing level, with a fixed leverage factor. The leverage effect means that any movements in the Underlying Asset are amplified. Daily Leverage Certificates will leverage the investment exposure by a fixed amount, e.g. 3, 5 or 7 times. Therefore, the daily percentage return of Daily Leverage Certificates will be equal to the daily percentage return of the Underlying Asset multiplied by the fixed leverage factor, before costs and fees Daily Long & Short - There are two types of Daily Leverage Certificates - Daily Long and Daily Short which enable investors to take a long or short exposure to an Underlying Asset. Long DLCs allow you to generate leveraged gains when the Underlying Asset goes up. On the other hand, Short DLCs increase in value when the Underlying Asset goes down, allowing investors to achieve positive and leveraged gains during a market downturn. Conversely, you will sustain leveraged losses when the Underlying Asset goes down for Long DLCs, or when the Underlying Asset goes up for Short DLCs. How to read a DLC name Profit & Loss calculation example 2. How are DLCs different from other leverage products? Comparing with CFDs ① CFDs have been introduced in the market for a much longer time and are therefore more mature in terms of offerings. There are different asset classes available in CFDs, while DLCs currently are available on certain indices and single stocks only. ② Because DLC is listed on the cash market of the SGX, there is no risk of a margin call. On the other hand, Air Bag (see section “Air Bag Mechanism”) is embedded in DLC which is designed to protect investors from losing the entire amount of investment. ③ The other difference between DLC and CFD is that the trading commission for CFDs is charged based on the total contract size (or total exposure). But for DLCs, the trading commission is charged based on the amount of the DLCs, which is a fraction of the total exposure. For the same amount of exposure, if the trading commission rate is the same between DLC and CFD, the total trading commission charged on the DLC will be less. Comparing with Buying stocks on margin account ① Similar to the above, the trading commission is charged on the entire contract value when investors buy stocks on margin. There is also the risk of a margin call. 3. Compounding Effect Daily Leverage Certificates are designed around the Daily Performance of their Underlying Asset. They apply a fixed level of leverage which makes it easier to determine price movements during a single Trading Day. However, this does not mean that DLCs are only for day trading purposes. Investors should note that if they hold DLCs for longer than one day, the return could outperform or underperform the leverage factor embedded within the product. This is because the exposure of a DLC is reset at the end of each Trading Day back to its fixed leverage factor. When markets open the next day, the performances of the Underlying Asset and the DLC will be measured from the closing levels recorded the previous Trading Day. What this means, in practice, is the performance each day is locked in, and any subsequent returns are based on what was achieved the day before. This is a process referred to as 'compounding'. The compounding effect can positively enhance returns in trending markets (upward or downward) whilst negatively impacting returns when the markets are more volatile or trend sideways for long periods. The effect of this compounding is further amplified as daily returns are leveraged. Refer to the issuer’s website at DLC.socgen.com to view illustrations on the Compounding and you can also check the historical performances of DLCs vs Underlying Asset (and hence the level of compounding effect) on the website. 4. Airbag Mechanism The Air Bag Mechanism is a mechanism that is built into the Daily Leverage Certificates. It is designed to reduce the actual exposure of the Daily Leverage Certificates to changes in the Underlying Asset in case of significant adverse movement in the Underlying Asset during the day. If the Underlying Asset is an Equity Index, for a 3 times Daily Leverage Certificates, the Air Bag will be triggered when the Underlying Asset moves against the Daily Leverage Certificates by 20%, and for 5 times Daily Leverage Certificates by 10% compared to the previous close, or previous New Observed Level (as defined below) if an Air Bag has already occurred on the same trading day. If the Underlying Asset is a Single Stock, for a 5 times Daily Leverage Certificates, the Air Bag will be triggered when the Underlying Asset moves against the Daily Leverage Certificates by 15% compared to previous close, or previous New Observed Price if an Air Bag has already occurred on the same trading day. Air Bag will NOT be triggered on the DLC that is in line with the market direction, i.e. on Long DLC when Underlying Asset is going up, or Short DLC when Underlying Asset is going down. Investors should note however that the Air Bag Mechanism will also maintain a reduced exposure to the Underlying Asset even if the Underlying Asset starts to move in favour of the DLCs after the Air Bag Mechanism has been triggered, thereby reducing its ability to recover losses for investors. There is no guarantee the Air Bag Mechanism will prevent investors from losing the entire value of their investment if the underlying continues to move beyond the airbag trigger. For a 5 times DLC, In the case of a big overnight drop of more than 20% (or 20% drop within the 15-minute observation period), the DLC would also result in a total loss. (Similarly, 15% for 7x and 34% for 3x) Refer to the issuer’s website at DLC.socgen.com to view illustrations on how the Airbag Mechanism works in practice. 5. Cost & Fees When the investors trade intra-day (buying and selling the Daily Leverage Certificates on the same Trading Day), the costs are the brokerage fees, trading fees and Bid/Ask Spread from trading which is typically the same as trading stocks on the relevant exchange. The leverage and hedging costs and fees will only apply when the Daily Leverage Certificates are held overnight. Costs and fees are transparent and can be computed with published data using the formula. The specific costs and fees for each product can be found on the individual product page on the issuer’s website at DLC.socgen.com. 6. Where and how can I trade the DLCs? Tiger Trade APP > Quotes > SG > Popular List > DLC 7. Are DLCs right for you?
GEAR UP! With DLC!
# SGX Stocks Opportunities

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.

Report

Comment（3）

  • Top
  • Latest