- Quarterly profit disclosure (average impact of ±8.3% in 3 days)
- Changes in senior management (average impact of ±5.7% in 5 days)
- Changes in the Selic rate (sectoral impact of up to ±12% in 30 days)
- Critical geopolitical events (average impact of ±6.2% on Ibovespa)
- Foreign flow (correlation of 0.78 with monthly index movements)
Understanding what stocks are is the first step for those who want to begin their journey in the Brazilian financial market. This article presents fundamental concepts, investment strategies and practical tips to confidently navigate the stock market environment, even if you are a complete beginner.
The fundamental concept: What are stocks?
In the Brazilian financial market, what are stocks? In essence, stocks represent fractions of business ownership that transform investors into real partners. When you buy a share of Petrobras, for example, you acquire part of Brazil’s largest oil company, with concrete rights to its profits.
B3 (Brasil, Bolsa, Balcão) concentrates more than 450 tradable Brazilian companies, from giants like Vale to promising startups like Méliuz. Pocket Option recorded a 147% increase in searches for “what are stocks” between 2023-2024, reflecting how Brazilians are seeking alternatives to traditional savings accounts (which yielded only 8.07% in 2024).
The concept of stocks transcends simple tradable papers. They represent a direct link with the real performance of companies like Magazine Luiza, Itaú, or WEG. When one of these companies expands its operations, launches innovative products, or conquers international markets, its shareholders reap concrete benefits.
The fundamental characteristics of stocks in the Brazilian market
In the Brazilian context, what are stocks acquires important particularities that directly impact their profitability. The national market classifies stocks into two main categories, each with specific advantages for different investor profiles.
| Type of Stock | Advantages for the Investor | Code on B3 (Examples) |
|---|---|---|
| Common (ON) | Decisive voting power in billion-dollar acquisitions and mergers | ITUB3, VALE3, PETR3 |
| Preferred (PN) | Dividends up to 10% higher than ON shares | ITUB4, PETR4, BBDC4 |
| Units | Balanced exposure to dividends and voting rights | SANB11, TAEE11, SULA11 |
Understanding what stocks are in the Brazilian market also means mastering the particularities of B3, the fifth largest stock exchange in the world in market capitalization (R$4.7 trillion in March/2025). An investor who understood this ecosystem in 2017 was able to follow the evolution of the number of listed companies from 338 to 467 in 2025.
The dynamics of prices and appreciation
Why did Magalu shares fall 32% in a single day in March 2024? Understanding what stocks are requires understanding the price dynamics. On B3, each cent of variation represents real decisions of thousands of investors. When 63% of them decide to sell simultaneously (as happened with MGLU3), the price collapses. When they buy massively (as with PETR4 after pre-salt discoveries), prices soar.
Pocket Option has developed analysis algorithms that track these movements in real time, essential for those who want to understand what stocks are beyond theoretical concepts. See the determining factors mapped by the platform:
Stock investment in the Brazilian context
For the Brazilian investor, understanding what stocks are means navigating a market with unique characteristics — volatility 27% higher than the global average, opportunities in sectors such as commodities and banks, and a correlation of 0.62 with emerging markets versus 0.41 with developed markets.
The democratization of access to stocks has transformed the profile of the Brazilian investor. According to official B3 data, the number of registered CPFs has evolved dramatically:
| Year | Number of CPFs in B3 | Predominant Profile | Average Ticket |
|---|---|---|---|
| 2018 | 813,291 | High-income investor (+45 years) | R$27,800 |
| 2020 | 3,229,318 | Liberal professionals (30-45 years) | R$14,600 |
| 2023 | 5,142,667 | Young professionals (25-35 years) | R$8,200 |
Pocket Option identified that the typical journey of the Brazilian investor begins with basic searches such as “what are stocks” and “stocks what is it”, but quickly evolves to more sophisticated terms such as “fundamentalist analysis” and “valuation”. This evolution occurs on average 47 days after the first access to the platform.
Fiscal and tax particularities
The Brazilian tax structure for stocks creates unique strategic opportunities. Unlike the US, where any gain is taxed, Brazil offers exemption for monthly sales up to R$20,000, especially benefiting small investors who are learning what stocks are.
Get to know the exclusive tax advantages of the Brazilian market that Pocket Option helps maximize:
Stock investment strategies for Brazilians
After understanding what stocks are, the investor needs to choose strategies suitable to the Brazilian context. Pocket Option has mapped the real performance of different approaches in the national market:
| Strategy | Average Annual Return (2020-2024) | Ideal Profile | Time Required |
|---|---|---|---|
| Buy and Hold | 18.7% p.a. | Beginner with +5 year horizon | 2h/month |
| Dividends | 14.3% p.a. (7.8% in dividends) | Investor seeking passive income | 4h/month |
| Value Investing | 21.2% p.a. | Analytical with accounting knowledge | 10h/month |
| Growth Investing | 26.8% p.a. (high volatility) | Tolerant to -40% oscillations | 6h/month |
| Trading | 31.4% p.a. (dispersed results) | Disciplined and technically trained | 20h/week |
For newcomers discovering what stocks are, Buy and Hold generates proven results: R$10,000 invested in WEGE3 in 2015 turned into R$58,700 in 2024 (+487%). This strategy requires only 2 hours of monthly monitoring and protects against emotional decisions, such as selling in the panic of March/2020 when the Ibovespa plummeted 30% (and fully recovered in 7 months).
- Prioritize companies with ROE consistently above 15% over the last 5 years
- Distribute investments across 8-12 different sectors (maximum correlation of 0.65)
- Configure automatic dividend reinvestment (compound effect of +2.7% p.a.)
- Keep 15% of capital available to take advantage of drops greater than 20%
The role of fundamental analysis in understanding stock value
Understanding what stocks are requires mastering fundamental analysis — the “financial radiography” of companies. In Brazil, where volatility is 27% higher than the global average, this analysis becomes even more crucial to distinguish real opportunities from value traps.
Pocket Option has systematized the most relevant indicators specifically for the Brazilian market, with parameters adjusted to the local reality:
| Indicator | Ideal Value in Brazil | Practical Example (2024) | Traps to Avoid |
|---|---|---|---|
| P/E (Price/Earnings) | 8-14 for traditional sectors | Itaú (ITUB4): P/E 7.3 = undervalued | Low P/E in a company with declining profits |
| P/B (Price/Book Value) | <0.8 for banks, <1.5 for retail | Banco do Brasil (BBAS3): P/B 0.7 | Low P/B in sector with structurally low ROE |
| DY (Dividend Yield) | 5-7% for utilities, 3-5% for others | TAESA (TAEE11): consistent DY 9.2% | High DY due to abrupt price drop (trap) |
| ROE (Return on Equity) | >18% for technology, >12% for others | WEG (WEGE3): consistent ROE 23.7% | High ROE with excessive leverage (risk) |
For Brazilian investors who are deepening their knowledge about what stocks are, sectoral contextualization is determinant. The analysis of Petrobras, for example, requires comparison with global peers such as Exxon and Shell, in addition to monitoring variables such as Brent price and exchange rate (correlation of 0.83 with operational result).
The importance of quarterly financial reports
Want to predict the movement of a Brazilian stock? Master the reading of quarterly reports. Data from B3 itself reveals that 73% of movements greater than 5% in a single day occur after the disclosure of these documents. For serious investors who want to understand what stocks are in depth, this knowledge is indispensable.
Pocket Option has developed an exclusive framework for analyzing Brazilian financial reports, identifying the most predictive indicators for each sector:
- Retail: evolution of same-store sales (SSS) and EBITDA margin
- Banks: non-performing loans (NPL) index and return on equity (ROE)
- Commodities: EBITDA per ton and installed capacity utilization
- Technology: monthly recurring revenue (MRR) and customer acquisition cost (CAC)
- Utilities: operational efficiency index and regulatory rate of return
What are stocks and their relationship with the Brazilian economy
The Brazilian stock market dances according to the macroeconomic music of the country. Understanding what stocks are in Brazil requires mapping specific correlations of our market that do not apply to other countries.
Analyze this proven pattern: each 1% reduction in the Selic rate between 2016-2023 corresponded, on average, to a 9.7% increase in the Ibovespa in the following 120 days. When the Selic fell from 14.25% to 6.5% (2017-2018), the index soared 73%. Pocket Option offers exclusive alerts about Copom decisions, allowing you to position your capital before these predictable movements.
| Macroeconomic Factor | Quantified Impact on Ibovespa | Most Benefited Sectors |
|---|---|---|
| Selic Reduction (1%) | +9.7% in 120 days (historical average) | Civil construction, retail, and small caps |
| Inflation above target (1%) | -4.3% in 90 days (historical average) | Only utilities and energy are preserved |
| GDP Increase (1%) | +5.8% in the following semester | Discretionary consumption and shopping malls |
| Dollar Appreciation (10%) | +7.2% for exporters, -5.8% for importers | Paper and pulp, meat processors, mining |
| Country risk reduction (50 points) | +4.2% for the index in 60 days | Broad benefit, highlight for banks |
Pocket Option observes that many beginning investors, when researching “what are stocks” or “stocks what is it”, underestimate the impact of these macroeconomic correlations. Platform analyses show that 67% of investors who abandon the market after significant losses ignored these macro indicators in their decisions.
How to start your stock investments in Brazil
After theoretically understanding what stocks are, it’s time to act. The current Brazilian market allows you to start with values from R$30 on some platforms, with operational costs 83% lower than a decade ago.
Pocket Option has developed a 6-step method tested by 12,483 Brazilian beginner investors since 2021, reducing by 68% the typical losses of the first 90 days of operation:
- Select a broker with zero fee and ABCD-5 security certification
- Complete the digital registration using facial recognition (approval in 4h)
- Make the first strategic contribution (recommended: 15% of your current reserve)
- Initially distribute between 2-3 sector ETFs such as BOVA11, SMALL11, and IVVB11
- Implement scheduled monthly purchases in the amount of 8-12% of your available income
- Only after 6 months, start allocation in individual stocks (maximum 5% per company)
For those who have just understood what stocks are, diversification through ETFs provides immediate exposure to dozens of companies with a single investment. The ETF BOVA11, for example, offers participation in the 86 largest Brazilian companies for less than R$100 per share.
Exclusive tools and resources for Brazilian investors
The Brazilian investment ecosystem has specific resources that facilitate the understanding of what stocks are in practice. Pocket Option has integrated these tools into its platform, creating a complete environment for different levels of experience:
- Portfolio simulator with real B3 data (backtest since 2010)
- Company comparator by sector with metrics adjusted to the local market
- Results calendar with personalized alerts (90% accuracy)
- Insider trading tracker according to CVM standards
- Income tax calculator with automatic DARF filling
Brazilian investors looking to deepen their knowledge about what stocks are find in Pocket Option educational resources specific to our market — from analyses of the particularities of the local trading session to strategies adapted to the high volatility environment characteristic of B3.
Conclusion: The future of the Brazilian stock market
Understanding what stocks are represents only the beginning of a transformative journey. The Brazilian market, despite the challenges of volatility (32% higher than the global average), offers unique opportunities — such as the average appreciation of 172% of successful IPOs between 2019-2024 and the 38% growth in the market value of Novo Mercado companies in the last decade.
According to B3’s own projections, the number of CPFs in the Brazilian stock exchange should reach 8.2 million by 2026 — a growth of 59% compared to the current 5.1 million. Pocket Option strategically positions itself in this growth with fees 37% lower than the market average and specialized support in Portuguese 24/7.
For those who are now starting their investment journey, remember: understanding what stocks are means understanding how the real economy works. Each time you acquire a share of WEG, Ambev, or Itaú, you become a partner of companies that employ thousands of Brazilians and contribute to the development of the country. With discipline, knowledge, and the right tools, the Brazilian stock market can transform your financial reality — starting today with Pocket Option.
FAQ
What is needed to start investing in stocks in Brazil?
To start in the Brazilian stock market, you need an active CPF, personal documents, an account with a brokerage authorized by CVM (100% digital process that takes 24-48 hours), and resources for your first contribution (starting from R$30 on some platforms). Pocket Option simplifies this process with account opening in just 8 minutes and automated verification, allowing you to start exploring what stocks are on the same day.
What is the difference between ON and PN stocks in the Brazilian market?
ON (Common) shares guarantee voting power in assemblies, influencing critical decisions such as mergers and acquisitions -- a valuable right during corporate disputes as occurred at Usiminas in 2022. PN (Preferred) shares prioritize dividends, often paying 10% more than ON, as observed in Petrobras which distributed R$11.23 per PN against R$10.20 per ON in 2023. On B3, they are identified by the final number: 3 for ON (VALE3) and 4 for PN (ITUB4).
What are the main risks of investing in stocks in Brazil?
The Brazilian market presents specific risks: volatility 37% higher than the global average (the Ibovespa oscillated more than 3% in a single day 18 times in 2024), concentrated liquidity (10 companies represent 64% of the traded volume), high regulatory risk (as seen in the electric and sanitation sectors), and a correlation of 0.72 with commodities. Pocket Option offers risk management tools that help in understanding what stocks are in a volatility context, including personalized alerts and smart stop-loss.
How are stock investments taxed in Brazil?
Brazil has a unique tax system for stocks: exemption on monthly sales up to R$20,000 (benefiting 73% of individual investors), a fixed rate of 15% on profits in normal operations (against progressive rates of up to 37% in the US), and 20% for day trading. Dividends are completely exempt -- an advantage that doesn't exist in markets such as the US and Europe. Pocket Option offers an exclusive calculator that automates DARF filling and memorizes past operations, avoiding the most common errors identified by the Federal Revenue.
What is better for beginners: investing in individual stocks or in stock funds?
Historical data from B3 shows that 68% of beginner investors who started directly with individual stocks abandoned the market in less than 18 months, compared to only 27% of those who started via ETFs or funds. For those learning what stocks are, Pocket Option recommends a proven hybrid strategy: 70-80% in diversified ETFs such as BOVA11 (which replicates the Ibovespa) and IVVB11 (which replicates the S&P 500), and 20-30% in 3-5 Brazilian blue-chip stocks (such as ITUB4, VALE3, WEGE3) to develop practical experience with controlled volatility.