What is Norbert’s Gambit? It’s a great way for you to convert your CAD to USD, or vice-versa.
The basic idea is to find a security that is listed in both US dollars and Canadian dollars. You then buy the security in one currency, transfer it over to the same security that is priced in the other currency, and then sell it.
Even though the basic steps for Norbert’s Gambit are the same at every bank, there are some confusing things that pop up when you try this for the first time.
Today, we’re going to go through how the process works with TD Direct Investing by showing an example of converting $1,000 CAD to USD using the Horizon US Dollar ETF (symbol: DLR).
Using Norbert’s Gambit With TD Direct Investing
1. Get a quote for stock symbol “DLR” and calculate how many shares you need to buy in order to convert the amount of money you’d like.
In our test, we’re converting $1,000 CAD to USD. Since we cannot buy fractional shares, we needed to do some rounding. Based on the price we got, it turns out we need to buy 76 shares of DLR.
2. Place a buy order on DLR for the number of shares you calculated.
We ended up buying 76 shares of DLR for a price of $1,003.96 + $9.99 (trading fee). This will now show up in your CAD TD Direct Investing account.
3. Transfer your DLR shares into DLR.U (this is the US dollar equivalent of DLR).
This is where the magic happens. You transfer your DLR shares in CAD into DLR.U shares in USD. Note that you may have to wait a day or two after your buy your DLR shares in order for the security to become eligible for transfer.
The formal name for this process is called “journaling”, and you can do it yourself through the online tools.
Click on Accounts –> Securities Transfers to get the process started. You will then have to search for the security that you want to transfer. Type in “DLR” and select it.
Your screen should now look something like the image below.
Once you click “Continue”, you’ll be taken to the screen shown below. You’ll have to select which account you want to transfer the security to. Make sure you pick an USD investing account for the “To” account. In our test, we transferred from our CAD TFSA to a USD TFSA.
Once you click “Confirm Transfer”, your DLR shares will be moved to the designated account that you selected.
You now hold DLR.U shares which are priced in US dollars.
Also, note that it’ll sometimes still show the price in CAD (along with the flag) even though it’s in your USD investment account. This is nothing to worry about.
4. Place a sell order on all of your DLR.U shares.
So here is where things get a little confusing. In your USD trading account, the DLR shares might not display as DLR.U shares. However, you are able to sell the DLR as DLR.U in your USD trading account.
To make sure you’re trading correctly, don’t click on the sell button listed beside the name of your shares.
Instead, click on the “Buy/Sell” button on the top menu bar to start a fresh trade.
Then type in “DLR.U” in the symbol field to make sure you’re selling it as the USD version of the security. Now enter the full quantity of shares to sell, and choose “Limit Price” as the price type. We just made the limit price value the same as the bid price so that it would sell right away.
Your trading screen should look something like the below.
This trade will be executed in US dollars, and you’ll get screen confirming what you’re selling along with any associated fees.
Congratulations you have now converted your money into USD!
In our example we paid $9.99 CAD and $9.99 USD in fees. Since we only converted $1,000 we didn’t save much money compared with doing a straight-up currency conversion.
However, you need to remember that your cost for converting ANY amount of money will still be $9.99 CAD and $9.99 USD. If you’re converting larger amounts, say $10,000, then you will be saving over $100 easily by using Norbert’s Gambit as most banks charge around a 2% fee for currency conversion.
Things to Remember When Using Norbert’s Gambit on TD Direct Investing
1. Norbert’s Gambit takes time. The entire process took about 5 business days from start to finish. If you’re in a rush, then Norbert’s Gambit is probably not for you.
2. The more money you’re converting the more you’re saving by using Norbert’s Gambit. All of the banks charge foreign exchange (FX) fees on a percentage basis. Since the cost for executing Norbert’s Gambit is not percentage based, it’s better to convert a large amount versus a small amount. We would suggest using the gambit only when you’re converting $2,000 or more.
3. The price of DLR/DLR.U will change in line with the CAD-USD exchange rate. Remember that that price of DLR/DLR.U does fluctuate with the CAD-USD exchange rate. This means that while you’re waiting for your trades to settle you are exposed to any changes in the CAD-USD exchange rate for about 5 days. In our case, the price of DLR/DLR.U actually went up after we bought it so it worked in our favor.
We are not financial advisors, and no content on this site should not be taken as financial advice. No guarantee can be made if you invest based on the information provided on this blog. We make no warranty of any kind regarding the blog and/or any content, data, materials, information, products or services provided on the blog.
Erik
February 21, 2021 1:00 amWish I new this years ago. Thanks!
creditcarrots
February 21, 2021 5:53 pmNo problem! Good luck on your next CAD-USD transfer, and happy investing.
Nelson
March 5, 2021 8:36 amThank you showing how to do this. I have already used in many times. I have a CIBC Investors Edge account where the rep journalled it to the US side but didn’t change it to DLR-U so now I can’t sell it. Calling in is a major pain waiting 2 hrs at time and even then I’ve had to abandon it due to work.
Will be moving this account to TD cuz this feature is much better.
One thing on the TD site that has happened 3x is doing the transfer and nothing happens. The funds remain on the Canadian account (I’ve only changed to US funds). I’ve had to repeat the process a second time before it works.
creditcarrots
March 7, 2021 7:04 pmWe’ve had it where we do the transfer and nothing happens in our accounts, but we were still able to sell the shares on the other exchange. As long as you can sell the shares on the exchange (USD or CAD) then it should be okay.
Mouse
March 24, 2021 2:13 pmHey thanks for the tutorial. It is very useful.
Question about security transfer, how long does it take to process? When I transfered DLR from CAD account to US account, it showed a message as successful, but its been 4 hours and nothing is shown yet on the US account, it is still showing DLR belongs in my CAD account as if nothing has happened.
creditcarrots
March 24, 2021 3:27 pmIt’ll usually take 2-3 business days for it to complete.
Claudia Ronnebeck
March 25, 2021 12:14 amHi there,
I have tried to do this in my TD Waterhouse account, and I get the following error message.
“You have no eligible accounts for transferring securities. Please click the help icon at the top of this page for assistance”
There is also no ‘help icon’ at the top of the page.
Any suggestions?
Thank you!
Claudia
creditcarrots
March 25, 2021 5:27 pmDo you have a USD trading account and CAD trading account set up? If so, then you might have to call TD as it sounds like it might be an error on their end. We tried this Gambit with both TFSA and non-registered trading accounts.
Chris Wood
June 1, 2021 3:49 pmI assume this is the error you (and I) get until we have waited the one to two days between step 2 and step 3
learninginvestor
March 25, 2021 3:45 pmHi, thanks for this tutorial.
Will I need to call TD DI to journal the entries? or is everything done online?
Also, will there by ECN fees?
creditcarrots
March 25, 2021 5:26 pmYou can do it all online so no need to call TD. The trades will be subject to your normal trading commissions. Happy investing!
Patrick
March 26, 2021 1:40 pmCan we do that with other ETF? Vanguard ETF?
creditcarrots
March 26, 2021 4:10 pmIt should work with any cross-listed security! Just make sure the ETF is listed on a Canadian as well as US exchange.
Luke Burden
April 8, 2021 8:07 pmHi there,
As of April 2021, the securities transfer step is not possible without calling TD. Confusingly, the website will let you make the transfer and even give you confirmation that it worked, but the transfer will never complete. I confirmed this with TD staff – they say they’re working on fixing it, but who knows how long it’ll take.
So if you executed the transfer and are still waiting to see the ETF switch over to your USD account more than a business day later, better give TD a call.
Cheers!
Luke
creditcarrots
April 9, 2021 9:17 pmThanks Luke, and hopefully TD gets this fixed asap!
KJ
April 27, 2021 4:17 pmThis just happened to me. It looks like it goes through, but then I go to my USD account to sell and its not there, This happened last time and I had to call in… Pretty annoying
Your account does not hold a sufficient quantity of this security. Please check Order Status to verify that you don’t already have an open sell order on this security. [
Lloyd Concannon
April 21, 2021 3:51 pmHi There,
Thanks for this!
I just did the opposite to convert from USD to CAD. I bought DLR.U and it’s now showing in my holdings although it’s -$80 straight away?
Do I now wait a day or 2 and then it will allow me to transfer from US to CAD through the securities section?
Again thanks so much for the tutorial! Cheers, Lloyd
creditcarrots
April 21, 2021 10:44 pmHi there,
There might be some price fluctuations that’s causing the -$80. Just wait 2 business days and it should allow you to do the transfer!
John
May 6, 2021 11:36 amI am just trying this now. I bought DLR in my CAD account. I select Transfer Securities and I select from: CAD account, to: USD account. I enter the DLR symbol but it says the security is ineligible.
Do I have to wait a certain amount of time after buying DLR before those shares become eligible for transfer?
Also, when I do a lookup of DLR.U, it actually shows up as a CAD security, not USD. Both DLR and DLR.U have a CAD flag symbol next to them. Has something changed recently?
Thanks!
creditcarrots
May 6, 2021 11:37 amYou do have to wait 2 days for your DLR trade to settle before you can transfer it. As long as you can sell the DLR.U in your USD account then it should be okay. We called TD about this and they just said sometimes the securities don’t show up with the right currency flag by them.
Alistair
June 2, 2021 12:29 amJust wondering if this is still valid in June? Can you do all this without having to call them or do you have to call them?
I always do them in questrade but it takes longer for it to go to questrade and transfer it 🙁
I have both USD cash and CAD cash. As long as I wait 2 days, and transfer it, it automatically turns to DLR.U.TO?
creditcarrots
June 2, 2021 11:08 amWe didn’t have to call them at all – everything was online!
Chris Wood
June 3, 2021 5:38 pmI just completed this process without any TD human participation. Started on June 1 and just completed it now on June 3rd. If you follow the process to the letter, including ignoring some counter-intuitive things that the instructions warn you about, it works fine. I did have to wait two days between step 2 and step 3. Another anomaly is that if you don’t wait long enough it still shows you the securities as if they are available for transfer but gives you a “securities ineligible” error message which is very misleading. Just wait the full two days and try again.
Sara
July 1, 2021 10:30 amI’ve followed steps 1-3 but when I try to sell DLR.U via US account, I receive this message: “Account funds do not match the currency of the market. A currency conversion will be required and foreign exchange rates will apply. [41908]”.
How do I proceed from here?
creditcarrots
July 1, 2021 3:28 pmAre you selling this from your USD TFSA? If so, then there might be an error on TD’s end and you might have to phone them to fix it.
Sara
July 1, 2021 8:14 pmHas this error occurred in the past recently? I wonder if I wait a few more days, it will be resolved on their end.
David
August 30, 2021 11:21 amAny luck with this? I
am seeing the same error. I see the shares listed as DLR in my usd TFSA. If i try to sell DLR.U in my account, I get the erros, the market selected is not eligible fot market or stop market orders [43982].
Marc
July 8, 2021 6:33 amWorking like a charm so far. I bought DRL 10 minutes before close yesterday and by this morning they were already eligible for the securities transfer. Really nice to save about $720 on a 40k transfer. Thanks for the walk through!
creditcarrots
July 8, 2021 8:23 amGlad it worked well!
David
August 30, 2021 11:24 amI was able to successfully complete steps 1-3. I see the security listed as DLR in my usd tfsa. If I try to sell it, I get the error, account funds do not matcg currency of the market. When i go into a new buy/sell as you suggested from the top right of the webpage and type in DLR.U and try to sell. I get the following error, If i try to sell DLR.U in my account, I get the erros, the market selected is not eligible fot market or stop market orders [43982]. Any help would be appreciated.
creditcarrots
August 30, 2021 4:36 pmHi David, are you able to confirm how long it’s been in your account for? Maybe it hasn’t fully settled in TD’s back end yet. Also, are you able to sell it using a limit order rather than market or stop market?
If those things don’t work, then you might have to get on the phone with TD to see what’s happening. Best of luck!
Chris
March 5, 2023 9:32 amI am having the same problem as David. I have done this successfully in the past. I can confirm that DLR has been in my USD account for months as I expected the CDN dollar to go down.
Ella
September 8, 2021 8:07 amThank you so much for this!
I was able to finalize the whole process in less than 24h in September:
Tuesday 8AM – bought DLR
Wednesday 6:45AM – security eligible for transfer
Wednesday 6:55AM – sold DLR.U
I also made some money as DLR went up after I bought.
creditcarrots
September 8, 2021 8:12 amThat is great to hear! Happy investing!
Gui
October 8, 2021 4:59 pmMy experience is that it takes minimum 48 hours, all online.
1- Buy DLR in your CAD account (or DLR.U in USD account).
2- Wait 2 business days for the transaction to settle.
3- Journal the securities into the other currency.
4- Sell DLR.U stocks from USD account (or DLR in CAD account).
5- The proceeds are available as Cash on Hold / Real-Time Cash but won’t be available for cash transfers between accounts until it settles the next business day despite what is shown in “Available to withdraw”.
Note about step 3: WebBroker shows the DLR shares as eligible for transfer before 2 business days have passed. I tried doing it, it says successful yet nothing happens. If you wait 2 days, the DLR shares should be journalled into the other currency account immediately when doing the transfer.
Francois
October 19, 2021 2:20 pmDoes TD charge any fee for a security transfer?
creditcarrots
October 19, 2021 9:45 pmWe didn’t get charged anything.
Shashi
February 3, 2022 1:28 pmThank you for this article. I just did this transaction (USD to CAD) and was much more efficient and quick than I expected.
Feb 3, 2022 – called TD Direct Investing and explained what I intended to do.
– Placed a buy market order for DLR.U at USD 10.06 from USD Account with USD 9.99 commission
– Short-Sell DLR (for same no. of units as DLR.U) at CAD 12.73 from CAD Account with CAD 9.99 commission
– DLR.U purchase will settle on Feb 7 and will cover the short-sell
– Effective exchange rate after considering buy and sell commission is 1.2645 vs. Knightsbridge offered a rate of 1.2619 for the same amount and XE.com mid-market rate was 1.2659. All rates are checked within 15 minutes of the transaction at TD.
With the short-sell, you don’t have to wait two business days to settle and do the securities transfer.
I couldn’t do this online, so had to call TD Direct Investing and talk to a licensed trader. Once you say Norbert’s Gambit the licensed trader or their supervisor should be able to execute the above steps.
Anshuman
February 24, 2022 4:02 pmDoes it work for RRSP accounts as well?
Shashi
February 25, 2022 12:57 pmJust a follow-up to my previous comment. A week later when my wife tried to do the same transaction as I did, the licensed trader said it would cost us $45 or so to do the short-sell the same day. So we waited two days and then sold DLR from the CAD account. Fortunately, the exchange rate had moved in our favour, but it could have gone the other way too. Depending on the amount, I might consider paying the $45 for the licensed trader to do the short-sell the same day.
Greg
March 15, 2022 9:40 amThis was a great find! I purchased DLR yesterday. This morning, before market open I was able to initiate the transfer. Again, before the market open, basically immediately, I was able to place my sell order as directed above. It filled when the market opened. It took me less than 24 hours and all was online. As others have experienced, a little bonus, which could have as easily been a penalty, I made a few bucks on the exchange rate. Bottom line, I saved over $200 in FX. Sweet!
creditcarrots
March 15, 2022 12:53 pmGlad to hear it worked out well!
François
May 11, 2022 1:13 pmI clicked the sell button instead of DLR.U, by mistake… I have no idea if they charged a conversion fee?
Willam
June 13, 2022 6:12 pmI understand the process however I fail to see how the conversion moves (in and out of your favour) as the 76 shares in the example are bought at a fixed price as of day zero. So you have 76 shares at 767.60 -fee, when you journal (day 1,2 or 3) you the sell the DLR.U 76 shares for 10.10 (IMO this is the only value that will play, It could go to 10.08 or 10.06 but doesn’t sway that much, (I calculated a CDN dollar drop from .80 to .78 in 3 days came to 40$ which is about 0.002 pct relative to the 400$ it should have been say you bought DLR at those same 3 days later. (Inception point) Does this make sense? Is the Fx more dependant on the day of purchase rather than the day of sale? Thanks
Andrew
July 14, 2022 3:28 pmCorrect per example if you are buying USD using CAD you lock in the exchange rate at the time you buy the QTY of DLR shares. (except for slight variation in DLR.U 10.06-10.08 when selling).
But if you are going in the other direction to CAD with USD then you will not know what the value of DLR in CAD will be 3 days in the future when you complete the sale of your DLR shares into your CAD account.
Phil
August 17, 2022 3:59 amI assume you used TFSA to avoid paying taxes on withdrawal? This means you need to have the contribution room in the USD TFSA and CAD TFSA Correct?
Otherwise, if you use TD cash accounts, you eventually pay tax on the gains (if there were some), correct?
Or am I missing something.
creditcarrots
August 20, 2022 8:06 pmYes we did use TFSA, but you can do this with normal accounts as well. The gains on doing this are usually small enough that it’s still more attractive than doing a normal FX conversion at a bank.
JC
May 17, 2023 1:24 pmNice Walk though!! I am also looking to try this out, and I am doing USD to CAD in TD direct investing. My worry is trying Journal one DLR.U to DLR if that incur additional cost and having to call in every time I want to do a transfer. Anyone tried this recently and did not need to Transfer via phone agent? I would Rather do this online my self as waiting over the phone is gonna be a drag.