I get a lot of questions about what an "ADR" is and whether it matters if a stock is an ADR or not. In this article I will explain what these are and discuss a current example of an ADR stock that has been part of what I call the "best trade of the decade."

ADR stocks represent shares of a company headquartered outside the United States. These companies will register a certain number of their shares with a depository institution here in the United States and the institution will then list shares or an "American Depository Receipt" on U.S. based exchanges. This makes it possible for U.S. investors to buy shares of the company without having to engage in a cross-border transactions. Although the shares represent a foreign stock, the share price and dividends are now denominated in U.S. dollars.

In the video, I will walk through an example of one of these stock in Credit Suisse (CS), which has been in a fast decline for several months. Things may be getting worse for this ADR as newly announced banking regulations promise to slow profits and growth. Find out what these regulations are and why they may slow CS down in the long term.

Would you like to know how to take advantage of a falling stock with options? Click here to take a free options course.

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3.25 Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."