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Foreign ordinary shares

The issuer's actual home-market shares traded in the US over the counter, rather than a depositary receipt; usually flagged with an F on the ticker.

Buying foreign ordinaries means owning the same security a domestic investor in that country owns, with no depositary in between and therefore no adr-fee and no adr-ratio to translate. What you get instead is a thin over-the-counter quote in dollars that is really a dealer's markup on the overnight local close.

Spreads are wide, the price barely updates once the home market shuts, and settlement conventions can differ. The line is fine for a long-term holding and poor for anything time-sensitive.

Example: the home market closed at 58.30 local with the currency at 1.19 dollars per unit, implying $69.38. The US F-share is quoted $68.10 bid, $70.90 offered, a 4% round trip before any move in the stock.

Related: adr, gdr, otc-markets, cross-listing, adr-fee

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