Linkage
Linkage occurs when an investor is able to purchase a security on one financial exchange and sell it on another. Certain depositary receipts, such as American Depositary Receipts (ADRs), allow for linkage, which means that an investor can purchase shares of a company on a foreign exchange, such as the Toronto Stock Exchange, and then sell those shares on a domestic exchange, such as the New York Stock Exchange.

Investopedia Says:
Linkage should not be confused with arbitrage situations where an investor looks to profit from price discrepancies for equivalent securities trading on different exchanges. As financial markets progress, specifically with the growth of electronic exchanges spreading, the phenomenon of linkage will become more relevant and useful for investors in the future.

Related Terms:
American Depositary Receipt - ADR
American Depositary Share - ADS
Arbitrage
Exchange
Nasdaq
New York Stock Exchange - NYSE
Tokyo Stock Exchange - TSE

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