Glossary

The trading currency of a stock or ETF refers to the currency in which the security is bought and sold on a particular exchange. 💱

It is essential to understand the trading currency when investing in stocks or ETFs, as it affects the value of your investment due to currency fluctuations. Investors may need to convert their base currency into the trading currency to buy or sell securities, which can involve currency exchange fees and conversion risks.

Example: A UK investor buying shares of Apple Inc., which are traded on the US-based NASDAQ exchange, would need to convert GBP to USD to make the purchase, as the trading currency for Apple shares is USD.

Fun fact: Some stocks and ETFs are traded in multiple currencies across different stock exchanges. 🌍 For instance, an ETF may be listed on a European exchange in EUR, on the London Stock Exchange in GBP, and on the New York Stock Exchange in USD. This can provide investors with more flexibility in choosing the trading currency that suits their needs.