I just realized that quite a few new investors in the stock market don't fully understand the ceiling and floor prices. Today, I want to share some things I've learned through my trading experience.

Ceiling and floor prices are actually two levels set by SSC (the State Securities Commission) to control price fluctuations in the market. The ceiling price is the highest price that can be reached in a trading session, while the floor price is the lowest. They are calculated based on the reference price (the previous session's closing price) and the fluctuation limits of each exchange.

I'll use an example of the ceiling price to make it easier to visualize. Suppose a stock has a reference price of 20,000 VND. If traded on HOSE with a 7% limit, then the ceiling price will be 21,400 VND and the floor price will be 18,600 VND. The calculation is very simple: Ceiling Price = Reference Price x (1 + 7%), Floor Price = Reference Price x (1 - 7%).

Different exchanges have different fluctuation limits. HOSE is 7%, HNX is 10%, and UPCOM is 15%. This directly affects the ceiling price example for each stock traded on these exchanges.

When looking at the price table, the ceiling price is usually displayed in purple, and the floor price in light blue, making them easy to distinguish. The advantage is that they help control excessive volatility, preventing buyers from pushing prices wildly up or sellers from dumping stocks en masse.

But there are also downsides. When a stock hits the ceiling with huge pending buy orders, liquidity can be blocked, making it impossible to sell. Conversely, when a stock hits the floor with large sell orders, buying becomes difficult. That’s why I always analyze carefully before making decisions.

I often use the ceiling price example as a signal. If a stock hits the ceiling but still has strong demand, it could be a positive sign for the next session. But if there’s also strong selling pressure, I’ll consider taking profits to avoid risks.

An important note: the Vietnamese stock market operates on a T+1.5 basis, meaning you cannot buy and sell on the same day. So, when you see the ceiling or floor prices, think about it overnight before making a decision—don’t FOMO or buy the bottom blindly.

For warrants, the calculation is a bit more complex because it relates to the underlying stock. But the principle remains the same—ceiling and floor prices are calculated in advance to protect investors.

The key is understanding this mechanism will help you trade smarter. Not just buying when hitting the ceiling or selling at the floor. You need to analyze trends, supply and demand forces, and market news. That’s what I’ve learned after many years trading in this market.