When do you always wonder why a stock cannot rise or fall infinitely in a trading session? That’s because of the ceiling price and floor price—two important concepts that anyone trading securities in Vietnam must understand clearly.

The ceiling price is the highest level that a product can reach during a session, while the floor price is the lowest. They are calculated in advance based on the reference price (the previous session’s closing price) and the fluctuation margin. An example of ceiling and floor prices in practice is quite common—for instance, HPG stock with a reference price of 24,000 VND and a 7% limit on HOSE will have a ceiling price of 25,680 VND and a floor price of 22,320 VND.

Why are these regulations necessary? They help control prices, prevent extreme volatility, and protect investors from unforeseen shocks. On the other hand, they can also affect liquidity when there are too many buy or sell orders concentrated at the ceiling or floor.

The calculation is quite simple. For stocks and futures contracts on the three exchanges HOSE, HNX, and UPCOM, the fluctuation margins are 7%, 10%, and 15%, respectively. The formulas are: Ceiling price = Reference price x (1 + margin %), Floor price = Reference price x (1 - margin %). For warrants, the formula is a bit more complex because it also considers the underlying stock’s price and the conversion ratio.

When trading, you need to pay attention to some points. If a stock hits the ceiling with a large buy order volume, it’s a sign of strong demand—if you hold it, you might wait for the next session to sell at a better price. Conversely, if a stock hits the floor with low liquidity and bad news, it’s time to consider selling. Avoid FOMO at the ceiling or excessive greed at the floor—since the T+1.5 market in Vietnam does not allow buying and selling within the same session, thorough analysis is very important.

Remember that the ceiling and floor prices are different from the highest and lowest prices within a session. The former are calculated in advance, while the latter are determined by actual supply and demand. An interesting point is that the cryptocurrency market has no ceiling or floor limits—it fluctuates entirely based on supply and demand, whereas most international derivatives markets also do not apply this regulation.

In summary, understanding the real-world examples of ceiling and floor prices will help you make smarter trading decisions. They are important risk management tools in the Vietnamese stock market, and mastering them is the first step to becoming a successful investor.