About TRS

Main Growth Driver – Total Return Swap

Lion Financial Group, through its subsidiary Lion Brokers Limited, offers Total Return Swap to counterparties. The counterparty provides a certain amount of principal, Lion Brokers Limited will match the counterparty's investment to buy or sell stocks in a specified range according to the agreed leverage ratio of up to 2.5 times. At the end of period, the counterparty gets the gain/loss from the leveraged stock investment, and Lion Brokers Limited gets the interest of capital from the leveraged investment.

The total return swap under ISDA has been a mature product in the world, with a relatively simple trading structure, easy to understand and able to meet the financing needs of the counterparty.


Beginning of period


End of period

Note:①Take 1 period,X times the leverage as an example

Application Prospects


Use leverage to buy more shares

Provide a certain amount of principal to Lion Brokers Limited .

Lion Brokers Limited uses TRS to fund the purchase of shares based on the counterparties’ principal amount and the applied leverage ratio.


Massively increasing holding of shares without revealing ownership

The counterparty can buy and sell shares on the secondary market in the name of Lion Brokers Limited through TRS.

The ownership of the shares belongs to Lion Brokers Limited, not the counterparty, so the counterparty will not become a shareholder of the underlying company due to open a TRS position.


Use leverage to release liquidity

Provide a certain amount of principal to Lion Brokers Limited .

Lion Brokers Limited uses TRS to help the counterparty free up liquidity by allocating capital to the counterparty to buy its current holdings based on the principal amount and the leverage ratio applied.

Product Advantages

Compared to Margin trading in Hong Kong

Wider range of subject matter:

For the north-bound Shanghai-Shenzhen Stock Connect, the range of tradable shares in margin buying on domestic exchanges is limited. The total return swap trading shares only needs to be the tradable shares of Shanghai/Shenzhen Stock Connect.


More sources of funds:

Margin trading is financed by the finance department of Lion Brokers Limited. The source of funds for Lion Brokers Limited to carry out total return swap transactions with clients. In addition to the corporate finance department, Lion Brokers Limited can also enjoy more sources of funds and lower cost of funds by conducting back-to-back transactions with other financial institutions.


Shareholding disclosure transparency:

By margin trading, the legal ownership of the underlying stock belongs to the investor, who will be included in the category of shareholder disclosure. On the total return swap transaction, the legal ownership of the underlying stock belongs to Lion Brokers Limited, and investors will not be included in the category of shareholder disclosure.

Compared to domestic total return swaps

Fewer restrictions on hedging:

There are a variety of restrictions on hedging transactions in domestic proprietary hedging, including trading volume, hedging price, day trading, hedging suspension, etc.; there are relatively few restrictions on proprietary hedging outside Chinese Mainland.


More trading currency options:

Domestic total return swaps are not allowed to carry out financing transactions; overseas customers can choose Hong Kong dollar with lower interest. The customer's cost can be lower, but the customer may bear the foreign exchange risk.

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