There was a big hoo-ha regarding a Daily Leverage Certificate (DLC) that’s tracking Singapore Airlines (SIA) (SGX:C6L) shares as it has gone to $0.
Our trainer, Robin Ho, wrote about this issue on his Facebook Group:
SIA – How traders lost all their money in DLC through a bizarre price movement
Singapore Airlines (SIA) shares went ex-rights on 6 May 2020 and there was some unusual and bizarre movement in its share price wiping out the total value of SIA Daily Leverage Certificate (DLC) 5 X Short, which has been suspended as the underlying price has appreciated more than 20% from their theoretical ex-rights price (TERP) of S$3.71. This means that losses are now in excess of 100% for this leverage product.
The value of TERP was derived by Soc Gen, the market maker for DLC using a methodology which includes the rights share component based on the issuance of approx....