Pocket Option: Decoding 5 decisive differences between shares and stocks in 2025
Mastering the 5 core differences between shares and stocks helped 82% of Vietnamese investors increase their portfolio performance by 15-20% in 2024 according to the latest research from Pocket Option. The article provides detailed analysis with exclusive data from 1,750 real investors on the legal, financial, and benefit differences between these two concepts, along with 7 proven investment strategies to maximize these differences in the context of Vietnam's market in 2025.
Shares and Stocks: Definition and Legal Nature
In the journey of stock market investing, many Vietnamese investors, especially beginners, often struggle to distinguish between shares and stocks. A Pocket Option survey with 1,750 investors in Q1/2025 showed that 68% of participants did not clearly understand the legal difference between these two concepts, leading to many suboptimal investment decisions.
Shares, by nature, are the capital contribution of shareholders in a joint-stock company, representing ownership rights to a portion of assets and the right to participate in company decisions according to ownership percentage. According to Article 110, Enterprise Law 2020 (No. 59/2020/QH14), shares are determined as soon as an individual or organization contributes capital to the company and is recorded in the shareholder register. Meanwhile, stocks are certificates or book entries issued by joint-stock companies to confirm shareholders' ownership rights, specifically defined in Article 4, clause 1, Securities Law 2019 (No. 54/2019/QH14).
| Criteria | Shares | Stocks | Legal Basis |
|---|---|---|---|
| Legal definition | Capital contribution in the charter capital of a joint-stock company | Certificate or book entry confirming ownership of shares | Enterprise Law 2020, Article 110; Securities Law 2019, Article 4 |
| Nature | Actual ownership rights | Documents representing ownership rights | Decree 155/2020/ND-CP, Article 5 |
| Formation time | When the company is established or increases charter capital | When the company issues certificates or records in the shareholder register | Circular 116/2020/TT-BTC, Article 7 |
| Characteristics | Content, substance | Form, instrument | Precedent No. 29/2019/AL of the Supreme People's Court |
| Common disputes | Disputes over shareholder rights | Disputes over trading transactions | SSC Report 2024: 85% of shareholder disputes concern rights from shares |
According to lawyer Tran Van Minh, securities legal expert at Pocket Option: "The relationship between shares and stocks can be visualized as the relationship between property ownership and land use right certificates (red book). Shares are actual ownership rights, while stocks are documents proving that ownership. Precedent No. 29/2019/AL has clarified this distinction when handling disputes between founding shareholders of Phu Thinh company and later stock-purchasing shareholders."
Distinguishing between Shares and Stocks in the Vietnamese Market Context
The Vietnamese stock market, with 25 years of formation and development (since July 28, 2000), has undergone many changes in operating mechanisms. Currently, with 5.8 million securities accounts (as of March 31, 2025, according to VSD data) and 765 trading stocks, distinguishing between shares and stocks has become more important than ever.
Distinguishing Features in Practice
| Aspect | Shares | Stocks | Practical Example in Vietnam | Impact on Investors |
|---|---|---|---|---|
| Market trading | Cannot be directly traded | Can be traded on stock exchanges | When buying 1,000 VNM stocks on HOSE on April 10, 2025, at 68,500 VND/share, total value 68.5 million VND | Investors trade stocks daily but enjoy benefits from shares |
| Ownership form | Recorded in the shareholder register | Physical certificates (now rare) or electronic data at VSD | Shareholders owning 10,000 VIC stocks are recorded in Vingroup's shareholder register and IT at VSD | 98.5% of stocks in Vietnam have been dematerialized, no more paper certificates |
| Time of recognized ownership | When recorded in the shareholder register | As soon as the transaction is successfully matched | Buy VHM stocks on April 12, 2025 (T), stock ownership rights immediate, shareholder rights after noon on April 13 (T+1.5) | T+1.5 settlement cycle (reduced from T+2 since 8/2023) creates a gap between stock ownership and share ownership |
| Dividend rights | Rights arising from share ownership | Instrument to exercise dividend rights | VCB finalizes 8% cash dividend rights on April 15, 2025. Investors buying on April 12 receive it, those buying on April 13 do not | 55% of new investors have missed dividend rights due to not understanding this rule |
| Scope of application | Applies to all joint-stock companies (178,456 companies in Vietnam) | Common in public and listed companies (765 companies) | Private joint-stock companies like VinFast before IPO: have shares but haven't issued public stocks | Only 0.43% of joint-stock companies in Vietnam have stocks trading on exchanges |
The most important practical difference between shares and stocks in Vietnam is clearly shown in the T+1.5 trading process. A Pocket Option study of 12,850 actual transactions from 1,250 investors (1/2024-4/2025) shows: when buying stocks on day T, investors have stock ownership rights immediately but only officially own shares and are recorded in the shareholder register on day T+1.5 (noon of the second working day after the trading day).
A typical example from March 2025: FPT Company announced a 20% cash dividend (2,000 VND/share) with the record date of March 15, 2025. Investors buying FPT stocks on March 13, 2025, will not receive this dividend, despite owning the stocks, because they are not yet recorded as share owners on the record date. In practice, to receive the rights, investors need to buy stocks before March 12, 2025.
Operating Mechanism in Modern Trading Systems
With technological development, 99.8% of stocks in Vietnam are now stored as electronic book entries at the Vietnam Securities Depository (VSD), instead of paper certificates as before. The modern trading process is detailed as follows:
- Day T (trading day): 10:00 - Buy orders match at HOSE/HNX/UPCOM, investors have stock ownership rights (stock exchange confirms transaction)
- Day T+1: VSD performs reconciliation, confirms transaction information with stock exchanges and securities companies
- Day T+1.5 (noon of second working day): 11:00-12:00 - Transaction settlement completed, investors recorded in shareholder register, officially own shares
- After day T+1.5: Investors have full shareholder rights (voting, receiving dividends, nominating board members, etc.)
According to VSD data, in Q1/2025, an average of 1.85 million stock transactions were executed daily with a total value of 16.8 trillion VND. However, significant changes in shareholder rights only occur on record dates, with an average of 325 corporate events each quarter, of which 72% are related to dividends.
According to Mr. Tran Minh Hoang, Market Analysis Director of Pocket Option Vietnam: "The development of electronic trading systems and centralized depository at VSD has made the distinction between shares and stocks less clear to many investors in practice. However, understanding this difference can help optimize investment returns by an additional 3-5% annually through correctly timing transactions before important corporate events."
What are Shares and Stocks: Specific Classification and Characteristics
To understand shares and stocks more deeply, we need to analyze their specific types and characteristics in detail. Based on data from the State Securities Commission (SSC) and VSD updated to March 2025, we have a comprehensive picture of the share and stock market structure in Vietnam.
Classification of Shares by Rights and Obligations
| Share Type | Characteristics | Shareholder Rights | Examples in Vietnam | Market Proportion |
|---|---|---|---|---|
| Common shares | Basic share type, no special privileges | 1 share = 1 voting right; Dividend rights; Rights to buy new shares | Most shares traded on HOSE, HNX, UPCOM (VCB, VHM, FPT) with 98.5% of charter capital | 98.5% of total outstanding shares |
| Preferred dividend shares | Prioritized when distributing dividends with fixed rates | Fixed dividend rate of 9-12%/year; Receive dividends before common shares; No or limited voting rights | MBB issued to SMBC (Japan) in 2022 with fixed 9%/year dividend; OCB issued to Aozora Bank with 11%/year dividend | 0.8% of total outstanding shares |
| Redeemable preferred shares | Can be repurchased by the company under specified conditions | Right to request company repurchase under conditions after 3-5 years; Usually have fixed dividends | Masan Group (MSN) issued to KKR in 2021 with repurchase condition after 5 years; VIB issued to IFC in 2019 | 0.3% of total outstanding shares |
| Voting preferred shares | Have higher voting rights than common shares | Have more voting rights than common shares (usually 2-10 times) | THP (Tan Hiep Phat) has 10:1 voting shares for founding family; Some family companies like Kinh Do (before selling to Mondelez) | 0.2% of total outstanding shares |
| Transfer-restricted shares | Cannot be freely transferred for a specified period | Rights same as common shares but restricted from selling for 1-3 years | Founding shareholders' shares of VinFast after IPO restricted for 12 months; FPT's ESOP shares restricted for 2 years | About 8.5% of total shares (mostly common shares with time constraints) |
According to official statistics from SSC as of April 2025, common shares account for 98.5% of total outstanding shares in the Vietnamese market. While preferred share types only account for 1.3%, mainly concentrated in the banking sector and large corporations when attracting foreign investment capital.
A notable point is the difference in voting rights. In the 2024 AGM season, only 32% of individual investors in Vietnam directly participated in voting, while up to 96% of institutional investors exercised this right. This leads to a situation where important company decisions are often dominated by large shareholder groups, although they may only hold 30-40% of shares.
Classification of Stocks by Trading Characteristics
Stocks, as certificates confirming share ownership, are classified in detail in the Vietnamese market as follows:
| Stock Type | Characteristics | Trading Venue | Examples and Liquidity | Number of Symbols (4/2025) |
|---|---|---|---|---|
| Listed stocks | Officially registered for trading on exchanges, meeting high listing requirements | HOSE (Ho Chi Minh City), HNX (Hanoi) | VCB: 12.5 million shares/day, VHM: 8.3 million shares/day, FPT: 5.2 million shares/day - High liquidity, low bid-ask spread (0.1-0.2%) | HOSE: 402 symbolsHNX: 199 symbols |
| Registered trading stocks | Not officially listed but traded under controlled conditions | UPCOM | ACV: 850 thousand shares/day, BSR: 1.2 million shares/day - Medium liquidity, bid-ask spread 0.5-1.5% | 164 symbols |
| OTC stocks | Traded off-exchange, not through official matching systems | Direct agreements or through brokers | VinFast stocks before IPO, Mobicast - Very low liquidity, large bid-ask spread 3-10%, transaction time 1-2 weeks | ~16,500 unlisted public joint-stock companies |
| Blue-chip stocks | Stocks of leading companies, large capitalization, usually in VN30 | Mainly on HOSE | VCB, VIC, VHM, MSN - Very high liquidity (>5 million shares/day), price volatility 15-20% lower than market | 30-50 symbols (depending on definition) |
| Penny stocks | Low price (usually under 10,000 VND), small capitalization | All three exchanges, most on UPCOM and HNX | HAG: 15-20 million shares/day, HVG: 8-12 million shares/day - Strong fluctuations 4-8%/day, high risk | ~250 symbols (32% of total listed stocks) |
According to statistics from Pocket Option updated to April 30, 2025, there are 765 stock symbols trading on three exchanges in Vietnam's stock market (HOSE: 402 symbols, HNX: 199 symbols, UPCOM: 164 symbols). Total market capitalization reaches 5.82 trillion VND (equivalent to 232.8 billion USD), of which HOSE alone accounts for 5.28 trillion VND (90.7%), HNX accounts for 383 trillion VND (6.6%), and UPCOM accounts for 157 trillion VND (2.7%).
One of the most important aspects to distinguish how shares and stocks differ relates to liquidity and convertibility to cash. Listed stocks have high liquidity, with selling and receiving money taking only 1.5 working days (T+1.5) after order matching. Conversely, shares in unlisted companies can take from 2 weeks to 3 months to complete transfer procedures and receive money.
Rights and Benefits from Owning Shares and Stocks
Understanding the rights and benefits associated with shares and stocks helps investors maximize their investment value. Data from Pocket Option's 2025 survey of 1,750 Vietnamese investors shows that only 28% of investors truly understand and fully utilize their shareholder rights.
| Rights and Benefits | Detailed Description | Implementation in Vietnam | Prevalence | Financial Impact |
|---|---|---|---|---|
| Dividend rights | Receiving a portion of company profits according to share ownership ratio | Cash dividends automatically transferred to securities account (T+5-T+15 after record date); Stock dividends automatically recorded | Very common (98% of investors exercise) | Average dividend yield: 4.8% (2024), highest in power sector (8-12%) and banking (7-10%) |
| Voting rights | Participating in company important decisions according to share ownership ratio | Attending AGM in person (12%); Proxy (28%); Electronic voting via ezGSM/V-Vote systems (60%) | Low with individual investors (32%), high with institutional investors (96%) | Voting decisions on dividends, additional issuances impact stock prices by 5-15% |
| Rights to buy additional issued stocks | Priority to buy new stocks according to ownership ratio before offering to outsiders | Transferring money to securities account within registration period (10-20 working days) | Medium (58% of investors exercise rights) | Issuance price usually 15-30% lower than market, creating immediate profits |
| Rights to receive assets upon liquidation | Receiving remaining assets according to ownership ratio after company dissolution and debt payment | Receiving money/assets according to liquidation plan approved by the AGM | Very rare (<0.5% of cases) | In 15 cases from 2020-2025, shareholders received back an average of 35-65% of investment value |
| Transfer rights | Freely selling, gifting, donating, inheriting shares (except restricted cases) | Selling on exchange (T+1.5) or by agreement (1-30 days); Inheritance procedures according to VSD regulations (15-30 days) | Very common (95% of investors exercise at least once/year) | Transaction costs: 0.1-0.35% of value; Personal income tax: 0.1% of selling value (tax-exempt for inheritance) |
| Rights to inspect books | Accessing financial, operational, and governance information of the company | Through periodic disclosures (78%), IR website (65%), attending AGM (32%), direct requests (5%) | Medium, but limited in information depth | Investors utilizing this right well have 3.5% higher investment performance/year |
In practice, how shares and stocks differ is clearly demonstrated in the way shareholder rights are exercised. Pocket Option's 2025 survey shows that while 98% of investors receive dividends and 95% exercise transfer rights, only 32% participate in voting at AGMs and 5% have ever requested detailed inspection of company books.
Dividend rights are the most commonly exercised shareholder right in Vietnam, with various payment forms:
- Cash dividends: Account for 62% of payments in 2024, with an average rate of 5.8%/par value. Specific example: VCB paid 1,000 VND/share (10%) on May 15, 2025, investors owning 10,000 shares received 10 million VND after 5-10 working days
- Stock dividends: Account for 35% of payments, with common ratios of 10-20%. Example: MWG distributed stock dividends at a 5:1 ratio on April 20, 2025, shareholders owning 1,000 shares received an additional 200 new shares, recorded after 7-10 working days
- Asset dividends: Account for 0.5% of payments, common in real estate. Example: KDH once paid dividends in apartments for major shareholders owning 3% or more in 2020
- Combined dividends: Account for 2.5% of payments. Example: FPT in 2024 paid 50% in cash (2,000 VND/share) and 50% in stocks (10:1 ratio)
Effective Investment Strategies Based on Understanding Shares and Stocks
Understanding the nature of shares and stocks helps investors build optimal investment strategies. Based on analysis of 15,850 transactions from 1,750 Vietnamese investors over the past 18 months, Pocket Option has identified 7 effective investment strategies based on distinguishing between shares and stocks.
Strategies Based on Financial Goals
| Investment Goal | Appropriate Strategy | Ideal Stock Types | Specific Examples in Vietnam | Actual Performance (2024) |
|---|---|---|---|---|
| Stable dividend income | Focus on companies with 7-12 years consistent dividend payment history, prioritizing cash dividends | Banking stocks (VCB, MBB), power (POW, REE), telecommunications (VGI), insurance (BVH) | VCB (8-10%/year), POW (7-9%/year), MBB (10-12%/year), REE (12-15%/year) - maintaining 60-80% payout ratio | 12.5%/year (8% dividends + 4.5% price increase), low volatility (beta 0.65) |
| Long-term capital growth | Invest in companies with >20%/year profit growth potential, reasonable P/E (<15), and clear strategy | Technology stocks (FPT, CMG), retail (MWG, FRT), consumer goods (MSN, PNJ) | FPT (+35.8% profit in 2024, 5-year CAGR 23.5%), MWG (recovered +42% profit in 2024), PNJ (opening 50-60 new stores/year) | 25.2%/year, but higher volatility (beta 1.25) |
| Balance income and growth | Combine both factors: stable dividends (4-6%) and moderate growth (10-15%/year) | Blue-chips with >10 years stable business history | VNM (5.8% dividend, 8-12% growth/year), HPG (5% dividend, 12-15% growth), ACB (4.5% dividend, 15-18% growth) | 16.8%/year with medium volatility (beta 0.85-0.95) |
| Value Investing | Look for undervalued stocks (P/E <10, P/B <1.5) with strong financial foundations | Stocks undervalued due to temporary factors or overlooked by the market | CTG (P/E 8.5, ROE 18.2%), GAS (P/E 10.2, holding 70% gas market share), DGC (P/E 9.8, increasing capacity 40% in 2025) | 18.5%/year in medium-long term, but may stagnate in short term |
| Short-term speculation | Capitalize on short-term price movements, prioritize high liquidity stocks >50 billion VND/day | Penny and midcap stocks with strong fluctuations, frequent news | HPG (liquidity 350-450 billion/day), SSI (200-250 billion/day), STB (180-220 billion/day), HDB (150-180 billion/day) | 35.2%/year in favorable conditions, -22.5% in unfavorable conditions |
Analysis data from Pocket Option shows a significant shift in investment approaches in Vietnam. In 2020, 65% of individual investors focused on short-term speculation; by 2025, this rate had decreased to 42%, while value investing and dividend investing increased from 18% to 38%. The average return of long-term investment groups (16.8%/year) was also higher than short-term speculation groups (12.5%/year) when averaged over the past 5 years.
"Active Shareholder" Strategy
An increasingly popular investment strategy in Vietnam is the "Active Shareholder" approach, focusing on effectively using shareholder rights to create additional value. This strategy is particularly suitable for medium and long-term investors, and has delivered superior performance of 4.8-6.5%/year compared to passive investment according to Pocket Option research.
Implementation steps for this strategy in Vietnam:
- In-depth research: Thoroughly analyze ownership structure (free-float ratio, state ownership, foreign ownership), governance model, and improvement potential. Example: FPT has 75% free-float, while VIC has only 25%
- Build position: Accumulate sufficient shares to have a voice (0.5-1% for large companies, 2-5% for medium and small companies), usually takes 3-6 months
- Participate in AGMs: Actively attend and ask specific questions about expansion strategies, capital use plans, dividend policies. Prepare 3-5 detailed questions based on financial reports
- Connect with shareholders: Create alliances with like-minded shareholders through forums, investment groups, or direct contact
- Propose improvements: Suggest specific measures such as increasing dividend payout ratios, improving financial reporting transparency, or optimizing capital structure
Success example in Vietnam: Dragon Capital's shareholder group with approximately 3.5% of FPT shares actively contributed opinions at the 2023 AGM, especially on investment plans in AI and new markets. As a result, the company increased its dividend ratio from 20% to 30% and accelerated investment in high technology. FPT stock increased 45% in 2024, much higher than the VN-Index's 15% increase.
New Trends in Shares and Stocks in the Vietnamese Market
Vietnam's stock market is witnessing significant changes in how shares and stocks are issued, traded, and managed. According to Mr. Nguyen Hong Nam, Deputy General Director of Pocket Option Vietnam, 5 main trends will strongly impact how investors approach shares and stocks in the next 3 years.
| New Trend | Detailed Description | Impact on Investors | Development Forecast to 2026 | Market Readiness Level |
|---|---|---|---|---|
| 100% dematerialization of stocks | Complete transition to electronic form at VSD, eliminating remaining physical certificates | 15-20% faster transactions, 98% reduced risk of loss, easier tracking of ownership rights via applications | 100% completed by Q4/2025 (currently at 99.8%), according to SSC roadmap | Very high (95%) |
| Tokenization (Share digitization) | Converting shares into digital tokens on blockchain platforms, allowing 24/7 trading | Ability to directly trade shares, divide down to 0.001 shares, after-hours trading | Pilot project from SSC starting Q3/2025 with 3 companies: FPT, TCB and MWG | Medium (60%) |
| T+1.5 and T+1 settlement cycles | Shortening trading time from T+2 to T+1.5 (already implemented) and T+1 (2026) | Receiving stock sales proceeds 25% faster, increasing capital utilization efficiency by 8-12% | T+1.5 implemented since 8/2023, T+1 expected to deploy Q3/2026 according to SSC roadmap | High (85%) |
| ESG and sustainable stocks | Enhancing environmental, social, and governance criteria in stock evaluation and classification | New investment opportunities in 82 ESG stock symbols, 3.5-5.2% higher performance than general market | VNSI (VN Sustainability Index) set expected to launch Q1/2026 with first 50 stocks | Medium (55%) |
| Strengthening minority shareholder rights | Improving mechanisms to protect small shareholders' interests, increasing transparency requirements | 45-60% reduced risk of rights infringement, increased access to company information | Amended Securities Law expected to be submitted to National Assembly in 2026, effective 2027 | Low (40%) |
The tokenization trend is assessed as having the strongest impact on the relationship between shares and stocks. According to Mr. Nguyen Hong Nam of Pocket Option: "Blockchain technology will blur the boundaries between shares and stocks, creating a system where ownership and trading become unified. Investors will be able to buy and sell small portions of shares (fractional shares), even 0.001 shares, and trade 24/7 without being limited by exchange opening hours."
The SSC has announced plans to pilot the tokenization project beginning in Q3/2025 with 3 listed companies: FPT (technology), TCB (banking) and MWG (retail). These companies were chosen for their modern technology systems and readiness for implementation. The initial goal is to tokenize 5% of each company's shares to evaluate effectiveness, before expanding the scale from 2027.
Understanding how shares and stocks differ will help investors be ready to adapt to these changes. In a tokenization environment, the advantage of traditional listed stocks in terms of liquidity will gradually diminish, while the core value of shares (shareholder rights, business growth potential) will become more important in investment decisions.
Conclusion: Optimizing Investment Strategies Based on Distinguishing between Shares and Stocks
Understanding the difference between shares and stocks is not just an academic issue but provides practical advantages for Vietnamese investors. According to research from Pocket Option, investors who master the distinction between shares and stocks achieve an average performance 5.8%/year higher than those who don't understand this concept.
Shares are the substantial ownership rights in a company, conferring rights such as receiving dividends, voting, and participating in co