6 Ways to Play Virtual Stocks to Earn Real Money - A Detailed Guide for Vietnamese Investors

Stocks remain one of the potential investment channels in Vietnam, but many people still do not fully understand the forms of virtual stock trading to earn real money and how to apply them effectively. This article will help you grasp basic concepts, popular types of securities in Vietnam, along with the advantages and disadvantages of each form.

What Are Stocks?

(Stocks), also called shares, are financial products with value traded on the market. They can be in paper certificates, electronic form, or ledger entries, confirming the legal rights of the owner with respect to the issuer.

Because stock prices constantly fluctuate according to market conditions, stocks are considered a potential investment tool with the ability to generate higher profits than traditional investment channels.

6 Forms of Virtual Stock Trading to Earn Real Money

1. IPO Stocks (Initial Public Offering)

These are stocks issued by a company for the first time to the public to raise capital. They are common stocks, usually issued as certificates. Holders enjoy the usual rights of the company.

Advantages:

• Long-term growth potential
• Buy at low prices, high profit potential
• Publicly transparent stock prices

Risks:

• Very difficult to purchase IPO at the time of issuance
• Large price fluctuations, higher risk than regular stocks

2. Single Stocks (Individual Stocks)

Single stocks allow shareholders to confirm ownership of a part of the company. There are two types: common stocks and preferred stocks. Shareholders with common stocks can participate in meetings and vote but cannot withdraw capital. Preferred shareholders benefit from lower purchase prices and prepayment but do not participate in voting.

Advantages:

• Lower costs compared to asset management funds
• Higher long-term profits than gold, silver
• Self-controlled buying and selling, high liquidity

Risks:

• Difficult to diversify if capital is limited
• Require time for research and management
• Easily influenced by personal emotions

3. Stock Index (Stock Index)

A stock index is a collection of certain stocks or bonds representing a market segment. For example, VN30 in Vietnam includes the 30 strongest stocks (accounting for 80% of market capitalization), traded on HoSE. Globally, there is S&P 500 (the 500 strongest US stocks), DJIA (Dow Jones - top 30 stocks).

Advantages:

• Automatic diversification of investments (a trade holding many stocks)
• Cost savings due to less buying and selling
• Time-saving compared to selecting individual stocks

Risks:

• Limited profits due to inclusion of weaker companies

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

ETFs are investment funds holding multiple underlying assets. You can buy and sell ETF shares like stocks on an exchange. Some indices (S&P 500, DJIA) are also ETFs. In Vietnam, there are 7 active ETFs, with VFMVN30 ETF and foreign funds being the largest.

Advantages:

• Diversified and secure investment
• Easy to trade, low costs, dividend payouts
• Some ETFs trade with Options similar to Forex

Risks:

• High commissions depending on the trading platform
• Small 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 between a buyer and a seller regarding the price of an index at a future date. Currently, Vietnam has futures contracts based on VN30 with maturities: 1 month (VN30F1M), 2 months (VN30F2M), and other months (VN30F2006, VN30F2007,…).

Advantages:

• Can short sell without owning actual stocks
• Use leverage to increase potential profits
• Apply various investment strategies like technical analysis

Risks:

• Large lot sizes, difficult for small capital
• Continuous monitoring of the portfolio required
• Complex trading methods for beginners

6. Stock CFDs - Contract For Difference (Stock CFD - Contract For Difference)

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

Advantages:

• High leverage, access with limited capital
• 24/7 trading with global tools
• Instant, continuous intra-day trading

Risks:

• Potential losses exceeding initial capital when using leverage
• Less rights compared to actual stocks (no voting rights)

Stock Trading Platforms in Vietnam

According to HOSE data, the top 10 largest securities brokerage firms in 2020 (by trading value until Q2) are:

1. SSI Securities Corporation
2. Ho Chi Minh City Securities Corporation
3. Bản Việt Securities Corporation
4. VNDirect Securities Corporation
5. Mirae Asset Securities Corporation
6. VPS Securities Corporation
7. MB Securities Corporation
8. FPT Securities Corporation
9. Maybank KimEng Securities Limited Liability Company
10. BIDV Securities Corporation

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

Important Terms When Playing Virtual Stock Trading to Earn Real Money

Bonus Shares: A method of issuing additional shares to raise capital. For example, 1 share with a face value of 100,000 VND splits into 2 shares of 50,000 VND.

Treasury Shares: A company repurchases its own shares from the market to reduce outstanding shares, thereby decreasing dividend payouts.

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

OTC Shares: Unlisted shares on the exchange, with potentially inflated values compared to reality.

Bluechip Stocks: Shares of leading, stable companies with growing finances and large market share (e.g., VN30, HNX30).

Penny Stocks (Penny Stock): Very low-priced stocks, highly volatile due to small companies, with high profit potential but also significant risks.

Defensive Stocks (Defensive Stock): Stocks of stable companies with low risk. Essential sectors like electricity, water, pharmaceuticals are considered defensive.

Derivative Financial Tools: Besides stocks, you can invest in CFDs, futures, indices. These tools are more flexible, with larger markets, leverage options, 24/7 trading, and multiple strategies.

Investment Tips

To make money through virtual stock trading to earn real money, you need to:

• Dedicate time to learn stock investment knowledge
• Master technical analysis techniques
• Regularly update market trends
• Accumulate trading experience through practice

Start with simple strategies, manage risks well, and continuously learn from your experiences. Patience and discipline are key to success in stock trading.