American Depositary Shares
A type of security created to permit investors in the United States to hold shares in foreign companies and then trade those shares on US stock exchanges. The foreign company list its securities on a US stock exchange in the form of American Depositary Shares (ADS). Each ADS is equivalent to a specific number of shares listed on a stock exchange in the company's home country. ADS trading permits you to trade foreign companies' shares in US dollars on the US securities markets, as with regular US securities. The process of ADS creation involves American Depositary Receipts (ADR). If you get stock compensation from a foreign company or participate in its ESPP, you will probably receive American Depositary Shares.
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