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.

By: www.profitabletradingtips.com/profitable-trading-tips/trading-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.

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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.

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The price of an ADR follows the value of the stock in the nation of origin as translated

into US dollars.

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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.

By: www.profitabletradingtips.com/profitable-trading-tips/trading-offshore-stocks

Picking a Foreign Stock to Trade

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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.By:

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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.By:

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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.

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Technical Analysis of Foreign Stocks

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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.

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They are issuing stock to raise capital in the USA and must adhere to SEC rules consistent when what US

based stocks must do.

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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.

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As a Substitute for Commodity Futures

Trading

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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.

By: www.profitabletradingtips.com/profitable-trading-tips/trading-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.

By: www.profitabletradingtips.com/profitable-trading-tips/trading-offshore-stocks