What is Y
Y is a letter that appears on a stock symbol specifying that a particular stock is an American Depositary Receipt (ADR). An American Depositary Receipt (ADR) is a negotiable certificate that represents shares of foreign stock.
BREAKING DOWN Y
Y stock is a type of foreign security traded on U.S. stock exchanges. Designated with the symbol Y, investors can identify that these shares are foreign American Depository Receipts. Y stock offers investors one way to invest in foreign companies. Other ways to invest in companies with foreign domiciles include international funds, U.S. foreign stock initial public offerings and direct investments in foreign markets.
American Depository Receipts
American Depository Receipts are traded on a U.S. exchange. These shares are uniquely offered through a process that involves partnership between the foreign company and a U.S. depositary bank. Foreign companies deposit their shares at a U.S. bank, and the bank issues the shares on their behalf.
ADRs were introduced in response to the difficulties involved with buying shares in foreign corporations on foreign exchanges. They help to alleviate some of the challenges involved with foreign exchange trading, such as currency fluctuations and market price changes. ADRs offer a convenient way to invest in a foreign company and are also cost efficient. U.S. banks and brokerages can purchase bulk lots of shares from a foreign corporation and reissue them as ADRs on the New York Stock Exchange, American Stock Exchange, Nasdaq or over-the-counter markets, also known as off-exchange trading. In some cases the shares may not have a 1:1 ratio with share issuance representing groups of shares.
ADR distributions are managed by the depositing bank. ADRs may also have special tax treatment.
Stock Exchange Symbol
U.S.-listed securities will usually have a five-character symbol with the last character being the letter Y. The Y identifies the stock as an American Depositary Receipt. When an investor buys or sells ADRs, he or she is trading in the U.S. market and the trade will clear in U.S. dollars. Y stock listings are typically most common on over-the-counter markets, while ADRs trading large U.S. exchanges may or may not include the letter.
Y Stock Investing
Two examples of Y stock listings include Adidas AG and Bolsas y Mercados Españoles S.A. Both stocks trade on the over-the-counter market. Adidas AG, a German sportswear company, trades with the symbol ADDYY. Spanish financial firm Bolsas y Mercados Españoles S.A. trades with the symbol BOLYY.