UBS DLCs

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Get rewarded when you trade two Daily Leverage Certificates (“DLC”) issued by UBS from 17 July to 16 Oct 2023

Trade two Daily Leverage Certificates (“DLC”) issued by UBS from 17 July to 16 Oct 2023 and get rewarded

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What is a DLC?

A Daily Leverage Certificate (DLC)  is a form of structured financial instrument issued by banks and traded on the securities market. DLCs offer investors fixed leverage of 3 to 7 times the daily performance of an underlying index, be it a rising or falling market. The basic principle is simple – if the underlying index moves by 1% from its closing price of the previous trading day, the value of the 3x DLC will move by 3%.

SGX is Asia’s first venue to offer trading in DLCs, allowing investors to gain fixed leveraged exposure to developed Asian market indices and single stocks. This comes without the features impacting pricing for options such as implied volatility, time decay or margin calls.

DLCs were first introduced in Europe in 2012, where they are also called constant leverage products or factor certificates. They received wide interest from investors in Europe shortly after their launch.

How do you trade DLCs?

Daily Long and Short

DLCs are designed to be traded over short periods of time, predominantly on an intra-day basis. DLCs offer the flexibility to trade both rising and falling markets. For each underlying and leverage level, there is a long and short DLC available. A bullish investor who anticipates that the underlying index is set to rise over the trading day can select, for example, a 3x Long DLC, which will rise in value by 3% for each 1% rise in the underlying index (before costs & fees). Conversely, a bearish investor who anticipates the underlying index to fall can select, for example, the 3x Short DLC, which will rise in value by 3% for every 1% fall in the underlying index (before costs & fees).

Compounding Effect

If an investor’s trading horizon extends beyond a few days, it’s important to note that the performance of the DLC may vary from the leverage factor of the DLC. This is due to the performance of both the underlying index and the reset of DLC at the end of each trading day. When markets open the following day, the performance of the underlying index and the DLC will be measured from the closing levels recorded on the previous trading day. This means that any subsequent performance of the DLC is calculated based on the performance achieved the day before. This same process is repeated on each trading day. Over the period of more than one day, the profits or losses are thus compounded.

Airbag Mechanism

An airbag mechanism is built into each DLC to slow the rate of loss in the DLC during extreme market conditions. Each DLC listed has a pre-set trigger for the airbag mechanism, which is typically activated upon a 10% movement in the underlying index for a 5x DLC and a 20% movement for a 3x DLC (based on the closing price of the underlying index in the previous trading day). The airbag mechanism will only be triggered upon movements of the underlying index that goes against the direction of the product. For example, if the underlying index falls by 20%, (a) the airbag mechanism for a 3x Long DLC will be triggered, as the value of the DLC would decline with the drop in the underlying index. However, (b) the airbag mechanism for a 3x Short DLC would not be triggered because with the fall in the underlying index; This DLC’s value would increase in value by 60% (3 x 20%).
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Why Trade DLCs?

Leverage up to 7 times the daily performance of an underlying index

Flexibility to trade both rising and falling markets

Low capital outlay and loss limited to invested amount

No margins. No implied volatility impact. No time decay impact.

Transparent pricing due to tradability of the products on exchange

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Frequently Asked Questions

You must be a POEMS Customer who trades UBS Daily Leverage Certificates (DLC) from 17 July 2023 to 16 October 2023, and executes at least TWO transactions on Daily Leverage Certificates (DLC) issued by UBS.

Once the promotion ends, we will contact you via the email address you have registered with POEMS and give you the  details on how to collect your vouchers. Please note that these vouchers will only available for collection by customers residing in Singapore.

You can identify the Issuer through the DLC name.
Here is an example using the counter Tencent. TSGW – Tencent 5xLongUB241231

 

TSGW                  Counter Code

Tencent              Underlying

5x                         Leverage Factor

Long                    Long/Short

UB                        Issuer (UB = UBS)

241231                  Expiry Date (YYMMDD)

As a leverage product, Daily Leverage Certificates (DLC) give investors  increased exposure to an underlying asset with the potential for higher returns. The leverage of a DLC can be 3, 5 or 7 times. Based on 5x leverage, if the underlying asset, typically a single stock or index, moves 2% in favour from its previous closing price, you earn a 10% gain on the DLC (2% * 5 = 10%). However, if the underlying asset moves in the direction against your position, you could experience a -10% loss.

Please contact your dealer or Trading Representative. Alternatively, please contact our Customer Experience Unit otline at 6531 1555 or send an email to talktophillip@phillip.com.sg

Terms and Conditions

  1. This promotion is for Customers who trade UBS Daily Leverage Certificates (DLC) issued by UBS from 17 July 2023 to 16 October 2023 (the Promotion Period). 
  2. Eligibility Criteria for the reward:
    1. Accounts used for trading of DLCs must be Cash Plus, Margin (M), Custodian (C), Prepaid Custodian (CC), Cash Management (KC) and Share Financing (V) Accounts.
    2. At least TWO transactions on Daily Leverage Certificates (DLC) issued by UBS must be executed.
  3. The reward is capped at S$88 per customer, regardless of the number of Eligible Accounts through which the Customer places UBS DLC trades during the Promotion Period.
  4. Each Customer can only claim the reward once. Customer(s) with multiple Accounts will not qualify for the reward again.
  5. The reward will be credited to Eligible Accounts by 31 December 2023.
  6. The following persons are not eligible for this reward, unless approved by the management of Phillip Securities Pte Ltd (“PSPL”):
    • PSPL institutional customers and corporate customers
    • PSPL account holders whose accounts have been suspended, cancelled or terminated
    • PSPL and its associated entities and subsidiaries (direct or indirect), e.g. Staff, and Financial Advisory Representatives.
  7. In the event of a dispute over the customer’s eligibility to participate in this reward, PSPL’s decision will be final.
  8. PSPL reserves the right at any time in its absolute discretion to (i) amend, add to, and/or delete at any time of these Terms & Conditions without prior notice (including eligibility and qualifying terms and criteria), and all participants shall be bound by such amendments, additions and/or deletions when effected, or to (ii) vary, withdraw, and/or cancel any items or the reward itself without having to disclose a reason, and without any compensation or payment whatsoever. PSPL’s decision on all matters relating to the reward are final and binding on all participants.
  9. By taking part in this reward, the participant acknowledges that he/she has read and consented to these Terms & Conditions.

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