Bryan Perry

Invest Globally, Profit Locally

    Tweet This

The easiest way to do this is by purchasing bundles of foreign stocks safely through ETFs. These are created by firms that are willing to assume the risk of buying the underlying stock, while you can sit back and leverage your position with options. This way, you are investing in a basket of stocks, but with one single transaction to make a sector play.

But, if you're not interested in researching all of the companies in a particular ETF -- as there are hundreds of ETFs to choose from and each contains approximately 20 stocks -- and instead have one company in mind for purchasing options, you can look into American Depositary Receipts (ADRs).

With ADRs, foreign companies can trade on their home exchanges but also maintain separate securities on U.S. exchanges by committing to domestic listing and accounting regulations. But, just because a foreign company is transparent and adheres to accounting regulations doesn't mean its underlying price won't decline in sympathy with trading activity in its home market.

Best of all, though, finding options for ADRs is as easy as finding them for domestic stocks.

While domestic markets offer a seemingly unlimited amount of "options" for traders, you can satisfy your craving for some international flavor without having to stay up all night, watching your portfolio to see what happens during the overseas trading day!