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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


        This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors.  It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty as to its adequacy, completeness, accuracy or timeliness for any particular purpose of the above content.