Stocks
How is a stock issued
How is a stock priced at issuance
Ex-rights and ex-dividend
How to understand turnover ratio
Introduction to transaction statistics
What are real estate investment trusts (REITs)
What is an exchange traded fund (ETF)
Stock market terminology
Definitions of quote terms
Stock abbreviations - HK market
Time-weighted rate of return
How to buy stock
Structured warrants
Daily leverage certificates (DLCs)
Warrants
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%.
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
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.
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 |
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 |
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