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Global depositary receipt

A depositary receipt marketed in more than one country outside the issuer's home market, most often listed in London or Luxembourg and often sold to institutions only.

A GDR works mechanically like an adr but targets international rather than specifically US investors. Many are placed under exemptions that restrict them to qualified institutional buyers, so retail access and liquidity can be thin even when the underlying local stock is heavily traded.

GDRs are common for issuers from markets with capital controls or restricted foreign ownership, where the receipt is the only practical way for an outside investor to hold the exposure.

Example: a GDR represents 5 local shares trading at 220 local units, with 82 local units to the dollar. Fair value is 5 x 220 / 82 = $13.41, and the GDR quote should track that figure as the currency moves.

Related: adr, adr-ratio, foreign-ordinary-shares, cross-listing, dual-listing

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

How a position size is worked outAccount size, risk per trade and stop distance feed into one box giving the number of shares.ACCOUNT SIZE$25,000your capitalRISK PER TRADE1%of the accountSTOP DISTANCE$0.50entry to stopPOSITION SIZE500 sharesrisk budget: $25,000 × 1% = $250position size: $250 ÷ $0.50 = 500 shares
Working out a position size. Three numbers decide how big a trade is: the account, the share of it put at risk, and the distance from entry to stop. One percent of $25,000 is a $250 budget, and a $0.50 stop divides into that 500 times.

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