ADR price ≈ (Local share price × shares per ADR) ÷ FX rate (local currency units per USD)
An ADR lets you buy a foreign company on a US exchange in dollars.
What it is
An American Depositary Receipt is a negotiable certificate issued by a US bank that stands in for a set number of shares in a foreign company. It trades on US markets (NYSE, Nasdaq, or over-the-counter) in US dollars, just like a domestic stock. Each ADR represents a fixed ratio of underlying foreign shares, which can be one-to-one or many-to-one.
Why it matters
ADRs let US investors own foreign companies without opening a foreign brokerage account or dealing with foreign currency settlement. The main pitfalls are that ADRs can trade at a small premium or discount to the home-market shares, often carry custody or service fees deducted from dividends, and the ADR-to-share ratio means the ADR price is not the same as the local share price.
How it's calculated
An ADR is not a computed metric; its price tracks the underlying foreign share price, scaled by the number of local shares per ADR and converted to US dollars at the current exchange rate, minus any depositary fees.
How Quintarthai uses it
For dual-listed and cross-border names, Quintarthai shows the correct per-listing currency and the TSX/NYSE arbitrage spread on the cross-border page so you can compare a foreign listing against its US counterpart.
Cross-border note. Many large Canadian companies trade directly on US exchanges as ordinary shares rather than ADRs, so a TSX/NYSE dual listing is usually two real share lines, not an ADR structure.
FAQ
Is an ADR the same as owning the foreign stock?
Economically it is close: an ADR gives you the value and dividends of the underlying shares it represents. But you hold a US certificate, not the local shares directly, and depositary fees may apply.
Why does one ADR not equal one foreign share?
Banks set an ADR ratio (for example, 1 ADR = 4 foreign shares) to keep the ADR price in a typical US trading range, so the ADR price reflects that ratio, not a single local share.
Check your understanding
A US investor holds an ADR where 1 ADR represents 4 underlying foreign shares. If the local share trades at 10 units and the FX rate is 2 local units per USD, roughly what should the ADR price be (ignoring fees)?
ADR price ≈ (local price 10 × 4 shares per ADR) ÷ FX rate 2 = $20, because the ADR bundles 4 shares and is converted to USD.