Trading Offshore Stocks

Trading Offshore Stocks
By: www.ProfitableTradingTips.com

There can be a lot more to stock
trading than trading homegrown
stocks. One useful approach is to
find companies that work offshore.
Another viable option is directly
trading offshore stocks. The easiest
way to do this is with American
Depository Receipts, ADR’s.
By: www.profitabletradingtips.com/profitable-trading-tips/trading-
offshore-stocks

You can profit from trading
offshore stocks that are listed on
the New York Stock Exchange as
ADR’s. An ADR is a negotiable
security of a non-US based
company which trades in United
States markets.
offshore-stocks

Such stocks are denominated in US
dollars and, when they pay
dividends, pay in US dollars. When
trading offshore stocks via the ADR
route an investor avoids the risk of
dealing with a foreign stock
exchange and dealing in a foreign
currency.
offshore-stocks

An ADR is issued by a US bank
after shares of the original stock
are deposited in a custodial bank in
the nation of origin. This is
typically done by a broker in the
home country of the stock.
offshore-stocks

The price of an ADR follows the
value of the stock in the nation of
origin as translated into US dollars.
offshore-stocks

American Depository Receipts are an
excellent vehicle for trading foreign
stocks and not needing to speak the
language of the country in which the
original stock is issued. Because these
stocks trade live on US exchanges they
are amenable to sound technical
analysis.
offshore-stocks

Picking a Foreign Stock to Trade
offshore-stocks

There are two general routes when
trading offshore stocks. One is to
look for a market that is likely to
grow. If you believe that you can
make money trading the growth
and volatility in Latin America you
may look for stocks issued in Brazil
or Mexico.
offshore-stocks

A viable choice might be oil stocks,
especially in Brazil as recent oil
finds bring its reserves to the level
of Saudi Arabia. Alternatively, look
for individual companies that are
powerhouses in their homeland
and exporter goods and services to
the world.
offshore-stocks

In this case, issues such as a fall in
currency value in a nation may be
helpful both in making a stock cheaper
to buy and in making the underlying
company more competitive in world
markets. To the extent that the local
currency is volatile trading offshore
stocks can substitute for trading
currencies.
offshore-stocks

Technical Analysis of Foreign
Stocks
offshore-stocks

A level 3 ADR is the most secure
for investors and the best for
trading offshore stocks. These
companies must adhere to the
strictest set of rules when offering
stock in the USA.
offshore-stocks

They are issuing stock to raise
capital in the USA and must
adhere to SEC rules consistent
when what US based stocks must
do.
offshore-stocks

Fundamental analysis of level 3
ADR’s is easier because of the
English language materials which
the company must furnish
investors. These are typically large
companies that trade in high
volume.
offshore-stocks

As a Substitute for Commodity
Futures Trading
offshore-stocks

To the degree that Brazil is a huge
producer of soybeans, oil, and
coffee trading offshore stocks from
Brazil can be a way of tracking
commodities at the level of the
producer.
offshore-stocks

For those who both trade futures
and foreign stocks it can be a way
of getting twice the back for the
buck from the same basic analysis.
offshore-stocks

Trading Offshore Stocks

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Trading Offshore Stocks