Question about Charles schwab stocks Symbols for international market?

T

TradeTune

Hi,

It seems with charles schwab, you can buy almost any stock traded in any foreign stock exchange, But the symbol that schwab use is different than the actual one that trades on those countries which ends with letter "F" and charged $50. but with you trade same stock that ends Y ,, it's commsion free.

My question is where these forign stocks that traded in US market, volume and trades generated from ? and why there is two symbols and how come both are exactly correclated ?

Just want understand mechnism behind it, hope i could phrase my question clearly. Thank you
 
Last edited:
BMK said:
Can you give a couple examples, including both symbols?

BMK
More...



DLAKY (Deutsche Lufthansa ) ADR , Traded in US and commission free
DLAKF (Deutsche Lufthansa ) ORDF , Traded in Europe

You can see second symbol ends with "F", you will be charged $50 each side commission for buy or sell .
 
The ADR is traded on a US exchange. In general, it behaves like a US stock. So the commission is zero, like any other stock on the NYSE or Nasdaq exchanges.

DLAKF is the stock itself. If you buy this, Schwab has to conduct business on European exchange, where they are not a member, and they have to use a broker over there, and that broker has to get paid.

An ADR is literally a receipt showing that an institution is holding the stock for you. If you buy an ADR, you don't own the stock. You get all the same rights, i.e., voting and dividends, but the stock is held in custody for you by an institution that issues the receipt.

The purchase and sale of an ADR may be commission free, but the institution may charge some sort of custodial fees. If you buy the stock itself (DLAKF), you pay a commission to trade on a foreign exchange, but there are no custodial fees.

In very loose terms, it's like the difference between buying silver bullion versus buying shares of SLV. It's not a perfect analogy, but it comes close.

Have a look at this:

https://www.schwab.com/stocks/understand-stocks/adrs-foreign-ordinaries-canadian-stocks
 
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