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Daily Leverage Certificate (DLC) Shorting SIA Shares Are Now Worth $0 — Here is What Investors Need to Know
By Seedly  •  May 15, 2020

Last Wednesday (6 May 2020), Singapore Airlines (SIA) started trading on its ex-rights shares.

On that day, SIA shares rose more than 20%.

Retail investors who bought the 5x Short SIA daily leverage certificate (DLC) saw the total value of their certificates drop to $0.

Yes, you read that right.

As the share price of SIA had appreciated more than 20% from their theoretical ex-rights price (TERP) of $3.71

This TERP was derived by the Société Générale Group (SocGen) a French bank and the issuer of this DLC.

Investors who bought this leveraged product saw losses of more than 100%.

SocGen Singapore Airlines Daily Leverage Certificate Controversy

Investors who bought into the SIA DLCs saw red in more ways than one as there was a significant difference between the SocGen derived TERP and the official SIA TERP.

The SocGen TERP was priced at $3.71 while the official SIA TERP

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By Seedly
Launched in 2016, Seedly helps users make smarter financial decisions with its budgeting app which allows its 40,000 users to sync up their financial accounts and better manage their cash-flow. Last year, we introduced a new community feature which allows users to crowdsource knowledge from peers before making a financial decision.
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