Looking for Leverage & Inverse Exposure to the markets? Here are 5 Reasons to consider DLCs!
Updated: 22 Apr 2026
Written byAlevin K Chan
Freelance Contributor & Advertorials Writer
If you’ve been getting the sense that the stock market has been experiencing higher volatility, it’s not your imagination. A peek at the S&P 500 price chart clearly shows the stock market has been experiencing roller-coaster price action over the last six months.
Source: Google Finance (Information relating to past performances is for illustrative purposes only, and is not a reliable indicator of future performance.)
Volatility is commonly feared among the investing community, but more experienced investors know that higher volatility can boost market returns. The key is to know how to tap into this inherent feature of the stock market with the appropriate instruments to maximise your opportunities while minimising your risk.
L&I ETFs vs DLCs
You’re probably familiar with the use of Leveraged & Inverse (L&I) ETFs to expand your trading opportunities and amplify volatility gains. While they can certainly be useful in the right situations, L&I ETFs also come with drawbacks that can interfere with your potential returns.
Perhaps the most limiting factor is the leverage cap – L&I ETFs usually only offer up to 2x or 3x leverage. These ETFs also tend to be focused on Western markets, which means having to chase market hours late into the night for investors based in Asia.
DLCs – Higher leverage + wide coverage
Like L&I ETFs, DLCs offer fixed leveraged exposure to underlying markets – but at a much higher cap. With DLCs, you can go up to 7x leverage, meaning you can potentially more than double your exposure compared to L&I ETFs.
That’s not all. DLCs cover more markets on our side of the world, with a rich selection of Asian stocks and indices available for trade. This means you can trade during local market hours instead of staying up late.
But before we get ahead of ourselves, let’s first discuss what DLCs are and how they work.
DLCs at a glance - key things to know
Daily Leverage Certificates (DLCs) are exchange-traded financial products that offer fixed leverage on an underlying stock or index, without complicated margin requirements or option pricing. They multiply your trade by the leverage factor chosen.
For example, with a 5x Long DLC, a 1% rise in an underlying market index will produce a 5% gain for the DLC holder. However, if the index falls by 1% instead, the DLC holder will suffer a loss of 5%.
Note that a DLC’s daily leverage performance is calculated based on the market’s previous day’s close, and before cost and fees. Leverage is reset daily, which means compounding returns over time can cause returns to differ significantly from the underlying’s actual performance. However, for DLCs, losses will not exceed the initial amount invested, and therefore there is no risk of margin call.
As you can see, DLCs are complex instruments that offer high risk and high reward. For this reason, they may not be suitable for the general investing public. Indeed, they are classified as Specified Investment Products (SIP) and require passing a customer account review with your broker in order to trade them.
Now, let’s turn to how DLCs can benefit you.
5 things DLCs can do for your portfolio
1. Boost returns with up to 7x fixed leverage
DLCs offer fixed leverage that can significantly boost the returns on winning trades. You can choose from 3x, 5x or 7x leverage for greater flexibility and risk control.
At up to 7x, DLCs offer higher maximum leverage than many other instruments – all without the risk of margin calls. The maximum loss is pegged at the capital you have invested.
2. Trade in all market conditions, go long or short
With DLCs, you can choose to take a long or short position. This means you can potentially profit not only when the underlying stock or index goes up (with a long DLC), but also when it goes down (with a short DLC).
Of course, you will only gain the fixed leverage return if the market rises or falls in alignment with your position. If the market moves in the opposite direction, you will take a magnified loss instead.
3. Capital and cost efficiency
DLCs allow you to gain exposure to an underlying stock’s performance – without direct ownership of the stock. This means you only need a fraction of the capital to trade its price action, instead of outright buying the stock at full price.
Hence, DLCs provide greater capital and cost efficiency, allowing you to trade with lower capital, or control multiple positions at once.
4. Trade across a wide selection of markets
Leveraged ETFs tend to focus on the US and Europe stocks and indices, with Asian markets less often seen. Investors seeking leveraged trades on local or regional stocks and indices can look to DLCs for a wider selection of markets closer to home.
Societe Generale offers a comprehensive selection of Hong Kong, Singapore, and US DLCs, spanning major market indices such as the Hang Seng Index, and Chinese market leaders like BYD, Xiaomi and Tencent, along with local favourites like Singapore's Big 3 Banks (DBS, OCBC, UOB). Of course, you can also trade popular markets such as the US Magnificent Seven, the NASDAQ 100 and more. View the full list of DLCs on Societe Generale’s website.
With such a wide-ranging collection of DLCs, investors can enjoy greater regional coverage while staying connected to major Western markets. The ability to access Asian markets also means you can trade during Asian market hours, making DLCs a better lifestyle fit for Singaporean traders.
5. Transparent, direct trading on SGX
DLCs are convenient to trade, as you can buy and sell directly on SGX through any regular stock brokerage account. Trading is convenient as DLCs are priced in SGD.
Furthermore, as a listed product, DLCs are well regulated. As the issuer and designated market maker, Societe Generale provides liquidity in the Bid and Offer volumes for all their DLCs throughout the trading day where investors can buy and sell their DLCs with ease.
DLCs sound great, but what are the risks to watch out for?
By now, you’d recognise that DLCs are highly situational, and typically used for short-term, high-conviction trades. They do not fit as well into a long-term investment strategy.
As DLCs are not for everyone, it’s important to establish a clear understanding of the risk they may pose.
Leverage risk
Being a leveraged product, DLCs amplify both profits and losses. As explained, a 1% change in an underlying index can result in 3%, 5% or 7% profit or loss in your trade. Hence, it is imperative for investors to make the right call on their DLCs, and a few bad trades in a row can quickly wipe out previous gains. However, as pointed out earlier, the maximum you can lose is capped at 100% of your initial investment.
Compounding effect
Leverage on DLCs is reset daily, bringing about a compounding effect. Over time, the returns on DLCs can vary significantly from the underlying instrument’s real-time performance. This can make it more difficult to manage risk and stay in control of your trades.
Volatility risk
Because of their leveraged nature, DLCs amplify price movements. Market volatility is heightened when trading DLCs, and investors need to maintain strict discipline and utilise proper position sizing. As tempting as it may be to continue trading during periods of high volatility, knowing when to pull out and lock in profits is essential for trading DLCs safely.
Complexity risk
DLCs are highly complex instruments. For consumer protection, they are classified as Specified Investment Products, requiring investors to possess the necessary knowledge and experience to correctly assess the benefits and risks of trading them.
Keen on giving DLCs a try? Here’s how you can trade them
DLCs are listed and available on the SGX stock exchange, where SIP-qualified investors can trade the DLCs like a stock using their regular brokerage account. There’s no need to open an additional account with Societe Generale or other DLC provider.
Need more information? Societe Generale offers a comprehensive suite of educational resources and tools to get you up to speed on DLCs. Learn more about unique features such as the airbag mechanism, how compounding effects impact returns, and the risks of DLCs before trading them.
Disclaimer
This advertisement has not been reviewed by the Monetary Authority of Singapore. The views expressed under this article represent the personal and independent views of the author and do not constitute investment advice. The content of this article does not form part of any offer or invitation to buy or sell any daily leverage certificates (the “DLCs”), and nothing herein should be considered as financial advice or recommendation. The price may rise and fall in value rapidly and holders may lose all of their investment. Any past performance is not indicative of future performance. Investments in DLCs carry significant risks, please see dlc.socgen.com for further information and relevant risks. The DLCs are for specified investment products (SIP) qualified investors only.
About the author
Alevin K Chan
Alevin loves helping people make good money decisions. He briefly flirted with being a Financial Advisor, but quickly realised writing about personal finance is the better way to go.