6 Ways to Play Stocks and Securities Online Effectively in Vietnam

Although stocks are one of the leading investment channels, many people still do not fully understand the basic concepts and how to trade stocks online in Vietnam. This article will help you understand what stocks are, the different types of securities, as well as the advantages and disadvantages of each investment form.

What Are Stocks?

(Stock) is a financial product with value that allows the owner to buy and sell on the market. Stocks can be issued in the form of (certificates), electronic form, or ledger entries, confirming the legal rights of the owner with respect to the issuer.

The price of stocks always fluctuates according to market changes, making it an important investment channel with higher profit potential compared to traditional investment channels. Stocks are also the foundation for other derivative financial products such as indices, futures contracts, exchange-traded funds, etc.

6 Effective Ways to Trade Stocks

The Vietnamese stock market currently offers all types of securities and derivative financial products similar to international markets. Below are 6 popular investment methods that investors can participate in:

1. Initial Public Offering (IPO)(

IPO stocks )Initial Public Offering( are stocks issued by a company to the public for the first time to raise capital. These are common stocks, usually issued as certificates. Owners will enjoy the usual rights of the company.

Advantages:

• High growth potential in the long term
• Buy at low prices, high potential profits
• Transparent stock prices

Disadvantages:

• Very difficult to buy stocks at the IPO time
• Large fluctuations, higher risks than regular stocks

) 2. Individual Stocks###

Single stocks are stocks that allow shareholders to confirm ownership of a part of the company. There are two types: common stocks and preferred stocks, with different rights.

Advantages:

• Reduce transaction costs, pay only when buying/selling
• High profits when investing long-term
• Full control over stock selection and timing
• High liquidity, easy to trade on exchanges

Disadvantages:

• Difficult to diversify the portfolio, high concentration risk
• Need large capital to buy various stocks
• Time-consuming research and portfolio management
• Easily affected by personal emotions

( 3. Stock Index)

A stock index is a collection of certain stocks or bonds representing a specific segment. For example, VN30 includes the 30 strongest stocks in the Vietnamese market, accounting for 80% of market capitalization. There are also many international indices like S&P 500 ###500 US stocks( or DJIA )30 top US stocks(.

Advantages:

• Automatic diversification, reduces long-term risk
• Cost savings due to fewer repeated transactions
• Saves time, no need for detailed research on each stock

Disadvantages:

• Cannot generate super high profits due to weak stocks in the basket pulling the index down

) 4. Exchange-Traded Funds (ETF)(

Exchange-Traded Fund (ETF) is a fund that invests in multiple underlying assets. You can buy and sell ETF shares similar to trading company stocks. In Vietnam, FTSE Vietnam ETF is the first fund established in 2008, currently with 7 ETFs operating, among which 3 large funds account for over 90% of the total fund value.

Advantages:

• Diversify investments across many asset types
• Easy to trade, low costs, some pay dividends
• Some ETFs can be traded with Options

Disadvantages:

• Commissions can be high depending on the trading platform
• Small ETF volumes lead to large bid-ask spreads
• Some funds are heavily taxed

) 5. Stock Futures###

Stock index futures are contracts based on a stock index at a future date. These are derivative financial contracts where the buyer and seller agree on a price at a future time. In Vietnam, there are futures contracts based on VN30 with different maturities (1 month, 2 months, etc.).

Advantages:

• Can short sell without owning the stocks
• Use leverage to increase profits
• Similar to Forex trading, applicable to many investment strategies

Disadvantages:

• Large lot sizes, difficult with small capital
• Require continuous monitoring of the portfolio
• Trading methods can be complex for beginners

( 6. Stock Contracts for Difference (CFD))

Stock CFD is a trading style where you do not buy the underlying asset (stocks), but instead buy a contract with a CFD provider. Unlike real stock trading, you can use high leverage to generate higher profits.

Advantages:

• High leverage, access with less capital
• 24-hour trading, global tools
• Instant, continuous intra-day trading
• Low margin requirements

Disadvantages:

• Can lose more money than the initial investment if leverage is unsuccessful
• Fewer voting rights compared to common stocks ###no voting rights(

Stock Trading Platforms in Vietnam

According to HOSE, the top 10 largest brokerage companies in Vietnam are:

• SSI Securities Corporation )SSI(
• Ho Chi Minh City Securities Corporation )HSC###
• Bản Việt Securities Corporation (VCSC)
• VNDirect Securities (VNDS)
• Mirae Asset Securities (MAS)
• VPS Securities (VPS)
• MBS Securities (MBS)
• FPT Securities (FPTS)
• Maybank KimEng Securities (MBKE)
• Bank for Investment and Development of Vietnam Securities (BSC)

Vietnamese brokerage firms mainly provide stocks, fund certificates, warrants, bonds, and VN30 indices, operating on both HOSE and HNX exchanges.

Important Terms When Trading Stocks

Stock Bonus: A method of issuing additional shares to raise capital. For example, 1 share with a face value of 100,000 VND will be split into 2 shares with a face value of 50,000 VND each.

Treasury Stock: When a company repurchases its own shares from the market to reduce the number of shares outstanding and distribute dividends.

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

OTC Stock: Unlisted stocks that may have inflated prices compared to their actual value.

Bluechip Stock: Stocks of leading companies, stable operations, growing finances. Examples include stocks in the VN30 and HNX30 baskets.

Penny Stock: Stocks with very low prices, high volatility issued by small companies. High profit potential but also high risk of loss.

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

Derivative Financial Instruments: Besides stocks, you can also invest in stock CFDs, futures contracts, indices. These tools are usually more flexible, larger markets, can use leverage, trade 24/7, and apply various strategies.

Next Steps in Your Stock Trading Journey

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

Start by thoroughly understanding different investment forms, comparing their advantages and disadvantages, then choose the ones that suit your goals and financial capacity. Persistent learning and practice will help you develop effective stock trading skills.