Just now, I realized that many traders do not fully understand what warrants are, even though this is a fairly popular product in Vietnam’s securities market. In fact, what warrants are is not too complicated—they are simply a type of certificate that allows you to buy or sell an underlying security (usually a stock) at a predetermined price within a certain period of time.

The great thing about warrants is that you do not need to put up all the capital to buy stocks. With just a small amount of money, you can participate in the market with high leverage. For example, if ACB stock is priced at 26,000 VND, you can buy ACB warrants for only 800-1,490 VND. The leverage effect can be as high as 4-5 times, meaning your profit (or loss) will be much higher than if you bought the stock directly.

At present, Vietnam’s market only allows trading secured warrants for purchases (i.e., purchase-type warrants that have underlying collateral/assurance), issued by securities companies such as SSI, KIS, etc. This is different from warrants issued directly by companies. When you buy warrants from a securities company, they will hold the underlying stock as collateral to ensure the safety of investors.

Compared with options or other derivatives, warrants have clearly distinct features. Options are usually issued by derivatives exchanges, while warrants are issued by securities companies. In addition, warrants do not allow you to exercise your rights at any time—you can only do so on the expiration date (European style). Upon expiration, if the underlying stock price is higher than the strike price, you will receive a cash settlement of the difference, not the actual stock.

The Vietnamese warrants market currently has about 110 codes trading, mainly focused on large-cap stocks such as FPT, HPG, MBB, TCB, etc. These codes are selected from reputable companies, which helps you feel more confident when investing. Warrant prices are relatively low, and the minimum trading quantity is only 10 units, so everyone can participate with a small amount of capital.

If you want to trade warrants effectively, it is important to choose codes whose underlying stocks are strong and only buy when you expect the market trend will rise. You should prioritize warrants with a strike price lower than the current market price, a low conversion ratio, and a long expiration time to reduce risk. An important note is to keep track of the last trading day—if close to expiration and the underlying stock price is still below the strike price, cut your losses to avoid losing all your capital.

Capital allocation is also very important. Do not put all your money into warrants. A balanced approach could be 10-20% for warrants, 50% for the underlying securities, 10-20% for other derivatives, and 10-20% in cash. This helps you control risk more effectively. If you are new and lack experience, start with a small amount, monitor each trade, and build your skills step by step. From 2024 onward, the Vietnamese warrants market still offers many opportunities for those who understand this product well.