Hi, I have been asking this around the sub but nobody seems to have an answer.
A company like Pfizer for example, is listed in multiple places. Now what is keeping the two in line with eachother, across currency rates no less? Is it purely arbitrage?
They also have different opening hours across the world, so a stock like Pfizer is traded for longer than other stocks. So then in the morning trading on the other exchange, again just arbitrage it back to parity? It seems that would allow daily arbitrage opportunities for the brokers which would be insane?
Finally, how do dividends work with respect to currency differences? Pfizer pays out its dividends in dollars, but that dollar ammount will give varying ammounts of foreign currency, yet the ammount in foreign currency is also fixed. So do they hedge their position? Or how does that work?
I'm trying to figure out all the risks i need to be aware of with regards to investing in stocks like these, its considerably cheaper to buy them on the domestic market as opposed to dollars, but it seems they fluctuate with respect to more things than non-multiple-listed stocks.
Submitted January 13, 2017 at 06:28AM by samenrofringslikeLBJ http://ift.tt/2jfh8mz
