• How to calculate profit and loss from trading DLCs?


    DLCs can potentially deliver an amplified performance compared to the underlying asset. The percentage change in the underlying asset can be amplified by 3x, 5x and 7x. This works both ways for profit and loss. DLCs are a type of leveraged product. It is a product that can get you amplified returns when the market direction is correct. However, when the direction of the market moves against you, your losses is also amplified.

    This video provides numerical examples to explain how investors can calculate the expected profit and loss of trading a DLC.