A Quick Primer on ADRs and SKHY — 2026-07-16
Core thesis: SK Hynix ADRs (SKHY) are trading at a massive ~30% premium to ordinary Korean shares (000660), a rare and significant mispricing that savvy traders can exploit.
Key points:
- SKHY trading at $160.69 USD implies 2,378,212 KRW per share; 000660 closed at 1,830,000 KRW overnight—a 30% arbitrage gap
- ADRs are custodial bank notes (not actual shares) that are fungible with underlying ordinary shares; fees typically 1–5 cents per ADR
- SKHY ratio is 1/10 of an ordinary share; currency conversion (1,480 KRW/USD) must be factored into pricing
- South Korean market is closed during US hours, creating timing friction that allows the premium to persist
- Many IBKR clients can access Korean markets directly during local hours; traders can exploit intraday US swings, but position holders should account for the ADR–ordinary share differential
Takeaway: IBKR customers with direct Korean market access should buy 000660 during local hours instead of paying the 30% SKHY premium; US-only traders can trade SKHY intraday volatility but should be aware of the structural mispricing when holding positions overnight.