I have just thoroughly researched what warrants are and found that this is actually a quite interesting investment tool that many people haven't paid attention to in the Vietnamese market.

Simply put, what is a warrant? It is a type of certificate that allows you to buy or sell a certain stock at a fixed price before a specific expiration date. The good thing here is that you don't need to spend the full capital to buy the actual stock, but only buy warrants at a much lower price. If the market goes up as predicted, the profit you make can be many times higher than buying the stock directly.

Currently in Vietnam, securities companies like SSI, BSI, KIS issue covered warrants. The market has about 110 codes being traded, and the most popular ones are warrants based on major stocks like FPT, HPG, ACB, MBB. The prices are quite low, usually from 500-2000 VND, so even with small capital, you can participate.

First, it’s important to understand what warrants are compared to other products. They differ from options in that they are issued by securities companies, not derivatives exchanges. Unlike the underlying stocks, you do not own the company, only have the right to buy or sell at a predetermined price. The leverage is very high — when the stock increases by 7%, warrants can increase by 30% or more.

To buy warrants, you have two ways: buy directly from the issuing company or trade on the stock exchange after listing. Warrants usually have a term of 3-24 months. At maturity, if the stock price is higher than the exercise price in the warrant, you receive the profit; if lower, you lose your capital.

I see many people are worried because they wonder what warrants are and that they carry high risks. But in reality, if you have a clear plan, only participate when the market trend is upward, choose underlying stocks from reputable companies, and manage your capital wisely (only allocate 10-20% to warrants, the rest to stocks or cash), then the risk will be significantly reduced.

Calculating profit and loss is also not complicated. You need to calculate the breakeven point = (purchase price of warrant × conversion ratio) + exercise price. On the expiration day, if the underlying stock price is higher than the breakeven point, you make a profit; if it’s between the exercise price and breakeven point, you break even; if lower than the exercise price, you lose the entire capital.

An important note: the last trading day is 2 days before the expiration date. If you haven't sold and this date is approaching, and the warrant is in loss, it’s best to cut losses to avoid losing everything. Also, don’t forget to check the conversion ratio — a higher ratio will reduce your profit when you win.

Overall, the Vietnamese warrant market is still quite new but developing. With high leverage and low entry prices, it opens opportunities for small investors. But don’t forget what warrants are — it’s a double-edged sword, capable of helping you earn quick profits but also capable of causing rapid capital loss if you’re not careful.