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Various abbreviations have defined the best performing and most popular US tech stocks over the years. You may recall FAANG stocks or BATMMAAN stocks. Probably the best-known group of US stocks currently is the Magnificent 7.
Comprising tech giants Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla, the Magnificent 7 stocks are not only the most popular US tech stocks, but also some of the largest. Combined, these stocks makes up over a third of the S&P 500 Index.
In 2024, they were also some of the most significant market movers:
| Counters | 2024 Performance |
| S&P 500 Index | 25.0% |
| NASDAQ 100 Index | 25.9% |
| Magnificent 7 | 67.3% |
| Alphabet | 35.5% |
| Amazon | 44.4% |
| Apple | 30.1% |
| Meta | 65.4% |
| Microsoft | 12.1% |
| Nvidia | 171.2% |
| Tesla | 62.5% |
Source: NASDAQ, Motley Fool. The information relating to past performances is for illustrative purposes only, and is not a reliable indicator of future performance.
The combination of its popularity, market capitalisation and stock performance has translated into many investors either considering or already having significant allocation to individual Magnificent 7 stocks.
The Magnificent 7: Now On SGX
Investors interested in the US market can now magnify their positions with 3x leveraged exposure to Magnificent 7 stocks using the Daily Leverage Certificates (DLCs) issued by Societe Generale and listed on the Singapore Exchange (SGX). This can amplify your returns – both profits and losses – while only requiring a smaller capital outlay.
For example, if you want a $6,000 exposure to Tesla stocks, you only need about $2,000 in capital to achieve the same exposure via Tesla DLCs listed on SGX.
Not only that, investors can also choose to take long or short positions. Regardless of whether you hold a bullish or bearish view on an underlying Magnificent 7 stock, you can profit from market volatility by trading the respective Magnificent 7 DLCs.
Investors can buy or sell the DLCs on any regular stock brokerage accounts, just like any other Singapore shares, with Societe Generale providing liquidity throughout the SGX trading day.
Source: Societe Generale
The Magnificent 7 DLCs offer both long and short exposure to its underlying stocks, and can be traded in both US Dollars (USD) and Singapore Dollars (SGD). This can help you avoid constantly incurring foreign exchange transactions changing your Singapore Dollars for US Dollars, or vice versa, each time you enter or exit a position.
Since the US market is closed when investors trade the Magnificent 7 DLCs during Asian hours, you can react to market-moving events during Asian hours, such as earnings releases or major news announcements, more quickly.
The intra-day prices of SGX-listed Magnificent 7 DLCs are closely linked to underlying Magnificent 7 stock traded prices during Asian hours. This information can be found on several brokers in Singapore that offer Asian hour trading of US stocks, as well as on Societe Generale’s DLC website.
For example, in the screengrab below, you can see the Underlying Reference Close (TSLA: 410.44) of the Tesla stock in the US market, as well as the intra-day price of the corresponding 3xLong DLC (in the chart beside it). The grey box, depicting the Underlying Reference Price, shows Tesla’s intraday trading price at US$412.08.
Source: Societe Generale (as at 3 Jan 2025). The information relating to past performances is for illustrative purposes only, and is not a reliable indicator of future performance.
How You Can Trade Magnificent 7 DLCs
One of the key benefits of trading DLCs is that you can hedge or double down on your bullish or bearish view with the leverage feature. For example, Tesla posted their 3rd quarter earnings results after the US markets closed on 23 October 2024.
Investors who had a bullish view on Tesla after the earnings results, could have bought a 3x Long Tesla DLC on 23 October 2024. Holding this position from 23 October to 17 December 2024 when Tesla closed at a 2024 high of $479.86, they would have enjoyed a gain of around 726% (red line) on the back of Tesla’s 124% (black line) share price rally – depicted in the chart below.
Conversely, investors who had a bearish view or wanted to hedge an existing Tesla position would have incurred losses, as the 3x Short Tesla DLC declined 96% during this same period.
Source: Societe Generale (The information relating to past performances is for illustrative purposes only, and is not a reliable indicator of future performance.)
Another key advantage of trading Magnificent 7 stock DLCs on SGX is that it offers investors a unique opportunity to gain exposure to these popular US stocks during Asian hours.
Even though the US market is closed, investors can react quickly to market-moving events that have the ability to generate significant price swings during Asian hours, including company earnings announcements and political events such as the US Election.
For example, as information flow on the US Election vote count was trickling in on 6 November 2024 while the US market had closed, Tesla’s share price was gaining momentum – as you can see in the chart below. The 3x Long Tesla DLC on SGX offered investors a chance to get in on the price action while the US market was closed.
That day, Tesla shares surged as high as 10% (from US$259.56 to US$284.80). As a result, the 3x Long Tesla DLC, which investors could gain exposure to during Asian hours while the US market was closed, gained nearly 30% (from S$5.50 to S$7.08) during the SGX Market Hours.
Source: Societe Generale (The information relating to past performances is for illustrative purposes only, and is not a reliable indicator of future performance.)
Further, the chart above also depicts another 11% surge in Tesla share price during the US Market Session. Similarly, when the SGX Market Hours commenced the following day, investors saw their 3x Long DLC surge 31% higher at the open.
Of course, leverage can be a double-edged sword, and anyone who bought the 3x Short DLC would suffer losses of similar magnitude.
Stay Vigilant To Risks
One of the biggest advantage of trading SGX-listed DLCs may also be its biggest risk: trading during Asian hours. Once the Singapore market closes, you can no longer adjust or close your positions.
Price swings in the underlying Magnificent 7 stocks during US Market Sessions can introduce price gaps on the opening price of your DLC position when the SGX market opens. With 3x leverage, it will have an amplified impact on your DLC positions.
While DLCs have an Air Bag mechanism designed to reduce the DLC’s exposure in the case of significant adverse price movements on the underlying stock. This means it will not be triggered during SGX regular trading hours, and may only be triggered during the US trading hours (excluding the pre-market and post-market sessions).
To learn more about the Air Bag mechanism, view the full list of US Stock DLCs, and watch a video on how the US Stock DLCs work, on Societe Generale’s website.
Disclaimer
This advertisement has not been reviewed by the Monetary Authority of Singapore. 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.
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