Question:
I opened a stock brokerage account in a foreign country on that country stock exchange. My (US dollar) deposit was converted to their local currency. I have also noticed that ADRs in new york are being offered from that country (not before). Is their a profit advantage to having a currency account (in another country) and owning an ADR (from that same country) at the same time? Thank you.
Answer:
Yes; surely there is an advantage for having both accounts.
Although trading desks at financial institutions tend to close arbritrage opportunities as they appear, there is usually some space to chose the more attractive deal: in the local market vs ADR's
Over time, however, those opportunities will tend to disappear and it will be obvious which account will be bette to keep
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