6 Effective Ways to Play Stocks in the Vietnamese Market

Stocks are one of the leading investment channels, but many new investors still do not fully understand how to trade stocks effectively. This article will introduce the most common types of securities in Vietnam, helping you choose the investment method that suits your financial goals.

What Are Stocks?

(Stocks )Shares### are financial instruments representing ownership rights or loans that can be traded on the market. Stocks exist in various forms: physical documents, electronic records, or ledger entries, confirming the legal rights of the owner with respect to the issuing organization.

Stocks are traded on the stock market—a separate trading platform. Additionally, stocks serve as the foundation for other derivative financial instruments such as indices, futures contracts, and exchange-traded funds.

Because stock prices constantly fluctuate according to the market, they are considered an important investment channel with the potential for higher returns compared to traditional investment forms.

Types of Stocks for Online Investment

The Vietnamese stock market currently offers all types of trading instruments similar to international markets:

( 1. IPO Stocks )Initial Public Offering(

IPO stocks are those issued by a company for the first time to the public to raise capital. This is common stock, usually issued as certificates, with owners entitled to basic company rights.

Subsequent issuances are called SPO Stocks )Seasoned Public Offering###.

Advantages:

• Long-term growth potential
• Initial purchase price is often low, with high profits
• Public, transparent pricing information

Disadvantages:

• Very difficult to buy stocks at IPO time
• Large price volatility, higher risk compared to regular stocks

2. Single Stocks

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

• Common Stocks: Owners can participate in shareholder meetings, vote, and run for the board of directors, but cannot withdraw capital.
• Preferred Stocks: Owners are valued at a lower face value and have priority in payments, but cannot participate in voting.

Advantages:

• Low cost—pay only when buying/selling, no management fees
• High returns for long-term investments compared to gold, silver
• Full control over stock selection, timing of buy/sell
• High liquidity, easy to trade on the exchange

Disadvantages:

• Difficult to diversify with limited capital
• High risk when investing in individual stocks
• Time-consuming research and management
• Easily influenced by personal emotions

( 3. Stock Indexes )Index(

Stock indices are collections of stocks representing a specific market segment.

For example, in Vietnam:

• VN30: Includes the 30 strongest stocks, accounting for about 80% of market capitalization, listed on HoSE

International markets:

• S&P 500: 500 top US stocks, accounting for 70-80% of market capitalization
• DJIA )Dow Jones Industrial Average###: 30 top stocks, calculated as a weighted average

Advantages:

• Automatic diversification—one investment can hold many stocks
• Risk reduction through diversification
• Cost savings due to fewer transactions
• Time-saving—no need to analyze each company

Disadvantages:

• Limited profit potential—an index basket may include weak companies dragging down the entire index

( 4. Exchange-Traded Funds (ETFs) )ETF(

An ETF )Exchange-Traded Fund( is a fund investing in multiple underlying assets. You can buy/sell fund shares just like trading company stocks.

In Vietnam, FTSE Vietnam ETF )established since 2008### is the first ETF. Currently, there are 7 active ETFs, with the three largest being VNM ETF, FTSE, and VFMVN30 ETF, accounting for over 90% of the scale.

Advantages:

• Automatic diversification
• Easy to trade, low costs, periodic dividend payments
• Some ETFs can be traded via Options or Long/Short orders

Disadvantages:

• Commissions may be high depending on the trading platform
• Low trading volume leading to high bid-ask spreads
• Some ETFs are heavily taxed

( 5. Stock Index Futures )Stock Futures(

Stock index futures are derivative financial contracts where two parties agree on the price of a stock index at a future date. The seller must adhere to the agreed price regardless of market changes.

In Vietnam, futures contracts based on the VN30 index are available with various durations )1 month, 2 months, quarterly, etc.###.

Advantages:

• Allows short selling without purchasing actual stocks
• Can use leverage to increase profits
• Similar trading to Forex, supporting various investment strategies

Disadvantages:

• Large lot sizes, difficult for small investors
• Requires continuous portfolio monitoring
• Complex trading methods for beginners

( 6. Stock CFDs )Stock CFD(

Stock CFD is a trading style where you do not buy the underlying asset but sign a contract with a provider. Unlike actual stock trading, CFDs allow high leverage and Long-Short orders similar to Forex trading.

Advantages:

• High leverage, access with less capital
• 24-hour trading, global tools
• Low margin, instant continuous trading
• Can profit from both rising and falling markets

Disadvantages:

• Greater risk of losing more than the initial investment if leverage is misused
• CFD owners have fewer rights than common shareholders )no voting rights, no candidacy(

Stock Trading Platforms in Vietnam

According to HOSE reports, leading Vietnamese brokerage firms include:

• SSI
• HSC )Ho Chi Minh Securities(
• VCSC )Bach Viet Securities(
• VNDirect
• Mirae Asset
• VPS
• MBS )MB Securities(
• FPTS )FPT Securities(
• MBKE )Maybank KimEng(
• BSC )BIDV Securities

These companies provide main products: stocks, fund certificates, warrants, bonds, and VN30 index, operating on both HOSE and HNX.

Additionally, many international trading platforms offer services for the Vietnamese market with a variety of products such as international indices, CFDs, cryptocurrencies, and commodities.

Important Terms When Investing in Stocks

Stock Bonus - A method of issuing additional shares to raise capital. 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 outstanding shares, thereby decreasing dividend payouts or preventing takeover attempts.

ESOP Stock - Preferred shares issued at a lower price to employees, aimed at retaining talent or optimizing taxes.

OTC Stock - Unlisted stocks traded outside official exchanges, which may be valued higher than their actual worth.

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

Penny Stock - Low-priced stocks with high volatility from small companies. They have high profit potential but also high risk of loss.

Defensive Stock - Stable stocks with low risk from essential sectors such as electricity, water, pharmaceuticals.

Financial Derivative Instruments - Products like CFDs, futures contracts, indices. They are more flexible, with larger markets, supporting leverage and 24/7 trading with various strategies.

How to Learn and Develop Stock Investment Skills

To make money from stock trading, you need to spend time learning knowledge, technical analysis, monitoring market trends, and accumulating real trading experience.

There are many educational materials, analysis tools, market forecasts, and significant events affecting stock prices available on reputable platforms.

The next step is practice on free demo accounts—a safe way to hone trading skills without risking real money. This helps build confidence and experience before engaging in real trading.

Conclusion: Effective stock trading requires solid knowledge, clear strategies, and disciplined trading. Start by thoroughly understanding each type of stock, choosing the method that aligns with your financial goals and risk appetite.