I just realized that many Vietnamese traders are still unfamiliar with covered warrants, and some don't even know what they are. Today, I want to share some things I've learned from the market about this product.

So, what are covered warrants? Simply put, they are a securities product that allows you to buy or sell a certain stock at a predetermined price within a specific period. The advantage is that you don't need to pay the full amount to buy the stock, but only a much smaller part. That's also why warrants have higher leverage compared to regular stocks.

In the Vietnamese market, the main type of warrant traded is the covered warrant, issued by securities companies. These companies must hold a certain amount of stocks as collateral. Currently, the market only allows trading of call warrants, not put warrants.

I remember the first time I learned about warrants, I was quite confused by the information. But once I understood the mechanism, I realized it can be quite useful if used properly. The warrant market in Vietnam is still quite new, but it has attracted many investors thanks to its flexibility and high leverage.

Popular warrant codes are often issued based on stocks of large companies like ACB, FPT, HPG, MBB, MSN, MWG... This creates a good opportunity for participants because you're trading based on stable underlying stocks.

The price of warrants is quite cheap, usually only a few hundred to a few thousand VND, with a minimum trading volume of 10 warrants. This is very convenient for small capital investors wanting to participate in the market.

However, note that warrants have expiration dates. When the expiration date arrives, if the underlying stock price is higher than the strike price, you will receive the cash difference. Conversely, if the price is lower, you may lose your entire investment.

My experience is: only participate in warrants when you believe the market is in an uptrend. Choose warrants with a strike price lower than the current stock price, and prioritize those with a lower conversion ratio for higher profits. It's better to select longer expiration periods to reduce risks from sudden market fluctuations.

Another important point is capital management. Don't put all your money into warrants. I usually allocate about 10-20% of my capital to warrants, 50% to the underlying stocks, 10-20% to other derivatives, and keep 10-20% as cash. This approach helps diversify risk better.

Also pay attention to the last trading day. If close to the expiration date the stock price is still below the strike price, you should cut losses early instead of waiting until expiration and losing all your capital.

Set clear investment rules before entering: buy and sell points, profit-taking levels, stop-loss levels. Following these rules is the key to trading warrants effectively and sustainably in the long term.