American Depositary Receipt - ADR

Filed Under » , , ,
Dictionary Says

Definition of 'American Depositary Receipt - ADR'

A negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction.
Investopedia Says

Investopedia explains 'American Depositary Receipt - ADR'

This is an excellent way to buy shares in a foreign company while realizing any dividends and capital gains in U.S. dollars. However, ADRs do not eliminate the currency and economic risks for the underlying shares in another country. For example, dividend payments in euros would be converted to U.S. dollars, net of conversion expenses and foreign taxes and in accordance with the deposit agreement. ADRs are listed on either the NYSE, AMEX or Nasdaq as well as OTC.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Articles Of Interest

  1. Hedging With Puts And Calls

    This trading strategy can reduce your risk - but only if you use it effectively.

  2. ADR Basics: What Is An ADR?

    These shares represent foreign countries, but on home soil.

  3. ADRs: Invest Offshore Without Leaving Home

    By investing globally and trading locally, American depositary receipts offer the best of both worlds.

  4. An Introduction To Depositary Receipts

    Learn about a security that allows you to invest in a foreign company through your local exchange.

  5. Investing In China

    This emerging market is making strides in regulation and disclosure.

  6. Investing Beyond Your Borders

    Investing abroad poses risks, but can also help you diversify. Discover ways to invest in foreign stocks.

  7. Go International With Foreign Index Funds

    As global trade continues to expand and the world's economies grow, spice up your portfolio with these exciting opportunities.

  8. Is there a difference between ADR and ADS ?

  9. Playing It Safe In Foreign Stock Markets

    Find out some of the lower-risk ways to invest in foreign markets.

  10. What parties are involved in the creation of an ADR?

Sponsored links

comments powered by Disqus
Hot Definitions

  1. Love Money

  2. Shark Watcher

  3. Judo Business Strategy

  4. Dogs Of The Dow

  5. Chinese Hedge

  6. X-Mark Signature

Recommended
Loading, please wait...
See More »
Trading Center