6 Effective Online Stock & Share Trading Methods in Vietnam

The stock market is one of the leading investment channels, but many investors still do not fully understand the different types of securities and how to choose the appropriate method when trading stocks elsewhere. This article will help you grasp basic concepts, available investment products in Vietnam, as well as the advantages and disadvantages of each type.

What Are Stocks?

(Stocks) are financial products representing ownership rights or influence of the holder. Securities can exist in the form of certificates, electronic records, or book entries, confirming legal rights with the issuer.

Traded on specialized stock markets, securities also serve as the foundation for derivative financial instruments such as indices, futures contracts, and exchange-traded funds (ETF). Due to price fluctuations according to the market, securities offer higher profit potential compared to traditional investment channels.

6 Popular Online Stock Investment Methods

The Vietnamese stock market currently offers a full range of products, from individual stocks to derivatives. Here are 6 investment methods that investors can choose from:

1. Initial Public Offering (IPO)(

An IPO )Initial Public Offering( is common stock issued by a company to the public for the first time to raise capital. Shareholders will enjoy the usual rights of the company.

When the company issues more shares to raise additional capital, these are called Follow-on Shares )SPO(.

Advantages:

• Significant growth potential in the long term
• Purchase at a low starting price, high potential profits
• Transparent pricing and public information

Disadvantages:

• Very difficult to buy shares at IPO due to high demand
• Large price volatility, higher risk than regular stocks

) 2. Individual Stocks###

Individual stocks allow shareholders to confirm ownership of a part of the company. There are two main types: common stocks and preferred stocks.

Shareholders owning common stocks have voting rights at shareholder meetings and can run for board positions, but do not have the right to withdraw capital (only transferable). Preferred stockholders are paid dividends first but do not have voting rights.

Advantages:

• Low cost — only pay transaction fees, no management fees
• Higher returns in long-term investments compared to gold, silver
• Full control over stock selection and trading timing
• High liquidity, easy to trade on exchanges

Disadvantages:

• Difficult to diversify with limited capital
• High risk due to lack of diversification
• Time-consuming research and record management
• Easily influenced by personal emotions when making decisions

( 3. Stock Index)

A stock index is a collection of stocks or bonds representing a market segment. For example, VN30 in Vietnam includes the 30 strongest ###market capitalization accounts for 80%( on HOSE. Globally, there’s the S&P 500 )top 500 US stocks(, DJIA )30 leading stocks weighted by average(.

Advantages:

• Diversified investment — owning VN30 means holding 30 different stocks, reducing risk
• Cost-saving due to fewer buy-sell transactions
• Time-saving — instead of researching each stock, you choose once
• Reduces emotional decision-making, increases profit opportunities

Disadvantages:

• Cannot achieve extremely high profits because the basket may include weak companies
• Returns can be dragged down by underperforming components

) 4. Exchange-Traded Funds (ETF)(

An ETF )Exchange-Traded Fund### invests in multiple underlying assets and is traded similarly to company stocks on the exchange. Some stock indices are also ETFs, such as S&P 500, DJIA.

In Vietnam, FTSE Vietnam ETF was established in 2008 and is the first fund. Currently, there are 7 active ETFs, including VFMVN30 ETF and foreign funds like FTSE, which account for more than 90% of total fund size (more than 90% of total fund assets).

Advantages:

• Diversification across many asset types
• Easy trading, low costs, periodic dividends
• Some ETFs can be traded with options (Options) like Forex

Disadvantages:

• High commissions depending on the trading platform
• Low trading volume leading to large bid-ask spreads
• Some funds are subject to high taxes

( 5. Stock Index Futures)

Stock index futures are derivative financial contracts where the buyer and seller agree on the price of a stock index at a future date. At expiration, the seller must transact at the agreed price regardless of the market price.

Vietnam currently has futures contracts based on the VN30 index with various maturities (1 month, 2 months, 6 months, 7 months…).

Advantages:

• Allows short selling without owning the actual stocks
• Can use leverage to increase profits
• Similar to Forex, applicable for various investment strategies

Disadvantages:

• Large lot sizes, difficult for small investors
• Requires continuous portfolio monitoring
• Trading can be complex for beginners

6. Stock Contracts for Difference (CFD)(

Stock CFD is a trading form where the buyer does not own the underlying asset )stock( but instead enters into a contract with a provider. Unlike actual trading, with CFDs you can use high leverage to increase profits, and place Long-Short orders similar to Forex.

Advantages:

• High leverage — access the market with less capital
• 24-hour trading, global tools
• Instant, intra-day trading
• Low margin requirements allow better risk control

Disadvantages:

• Can lose more money than the initial investment if leverage is misused
• Limited rights compared to actual stocks )no voting rights###

Where to Trade Stocks? Exchanges and Brokers in Vietnam

According to HOSE, the top 10 largest domestic securities brokerage firms include:

• SSI Securities Corporation (SSI)
• Ho Chi Minh City Securities Corporation (HSC)
• VCSC Securities Corporation (VCSC)
• VNDirect Securities Corporation (VNDS)
• Mirae Asset Securities Corporation (MAS)
• VPS Securities Corporation (VPS)
• MBS Securities Corporation (MBS)
• FPTS Securities Corporation (FPTS)
• Maybank KimEng Securities LLC (MBKE)
• BSC Securities Corporation (BSC)

Domestic stock brokers provide stocks, fund certificates, warrants, bonds, and VN30 indices, operating on HOSE and HNX exchanges. Investors should choose reputable brokers to ensure safety and effective trading.

Important Terms When Investing in Stocks

Stock Bonus — A method of capital raising by splitting shares. For example, 1 share with a face value of 100,000 VND is split into 2 shares with a face value of 50,000 VND.

Treasury Stock — A company repurchases its own shares from the market to reduce circulating shares, thereby increasing dividend value.

ESOP Stock — Preferred shares issued to employees at a lower price to retain talent.

OTC Stock — Unlisted stocks that may be valued higher than their actual worth.

Bluechip Stock — Shares of leading, stable companies with large market share. Examples include stocks in VN30, HNX30.

Penny Stock — Very low-priced stocks with high volatility, issued by small companies. Potentially high profits but also high risk of loss.

Defensive Stock — Stocks of stable, low-risk sectors such as electricity, water, pharmaceuticals.

Financial Derivative Instruments — Besides stocks, you can invest in CFDs, futures, indices. These tools are more flexible, with a much larger market, allowing leverage, 24/7 trading, and various strategies.

Advice for New Investors

To make money through stock investing, you need to spend time learning knowledge, mastering technical analysis, updating market trends, and accumulating real trading experience.

Start with basic steps, use demo accounts to practice skills, and always manage risks reasonably. With solid knowledge and disciplined trading, you have the opportunity to build a successful investment portfolio.