The official NTDOY/Nintendo discussion thread

[Lingyis]

cjpierciiw said:

Lingyis said:

1. why do you lose 1-2% on exchange? is that a foreignexchange fee?

2. why would 7974 be better to own than NTDOY? there could be price discrepencies and liquidity issues if and when nintendo decides to officially sponsor an ADR, but in theory they should performed equally well. and then there's the 1-2% factor to consider.

 

1. It looks like a way for Etrade to make money off the exchange.

2. Better liquidity, better spreads, ADR's can't trade on margin. You can't get in on the NTDOY intraday movement like you can 7974, because it tracks 7974 closing price.

A good thing about NTDOY is you almost always can guess where it will trade at the next day by tracking the 7974 closing price and exchange rates.

There is not much real difference between the two if you are just planning on holding them long term. With the exception of margin allowing you to double up.

  not sure what you mean by that... because NTDOY moves just like other ADRs, even AFTER market closes elsewhere.  it could have a high of say 58.5 and a low of 57.25.  the spread is horrible, but that's another story.  in principle there's arbitrage, but it probably doesn't exist after transaction fees given the difference is so small.

margin: oh, that's nice to know.  i have no idea how my etrade account calculates how much i can trade on margin, since the number they list don't add up quite right (the number seem too high!), after accounting for this ADR business...  not that i would trade on margins all that much, but maybe it's time for me to read the fine print.

1-2%: man, that's a huge rip-off.  oh well, if there's a stock you can't otherwise trade, i guess that's the price you'd have to pay.