French bank Societe Generale said Monday it has teamed with the Singapore Exchange to introduce one of Europe’s “fastest growing” trading products into Asia — something called “daily leverage certificates.”
The certificates, or DLCs, are exchange-traded products that allow investors to multiply their returns by betting on the daily rise and fall of the underlying asset. Those assets can be an index, a stock, foreign exchange or commodities products.
The DLC multiplies the return a trader would normally receive when he or she correctly bets on an asset’s rise or fall. So if a trader bets that an index will rise, and then the index does in fact move 5 percent higher, the DLC may entitle that trader to a 15 percent return. The instrument is designed primarily for intra-day trading.