Norbert’s Gambit — USD/CAD conversion without fees
⚠️ For informational purposes only. This article presents facts and concepts. WealthWise is not a registered investment advisor. For any investment decision, consult a licensed advisor with your provincial regulator.
Norbert’s Gambit is a legal technique to convert USD↔CAD without paying your broker’s conversion fees (typically 1.5-2%). On $50,000, that’s $750-1,000 in savings.
1. The principle
You buy a security dual-listed Toronto + New York (typically DLR.TO) in CAD, then "journal" it to the USD version (DLR.U.TO), then sell in USD.
Result: converted CAD→USD at interbank rate, paying only 2 broker commissions (≤$5 each).
2. Step-by-step at Questrade
- Buy 1,000 shares of DLR.TO in CAD
- Call Questrade: request "journal DLR.TO to DLR.U.TO"
- Wait 1-3 business days (free journal entry)
- Sell 1,000 DLR.U.TO in USD
- Result: USD in account at interbank rate
3. Real savings
| Amount | Broker fees (1.5%) | Gambit | Savings |
|---|---|---|---|
| $10,000 | $150 | ~$10 | $140 |
| $50,000 | $750 | ~$10 | $740 |
| $100,000 | $1,500 | ~$10 | $1,490 |
4. Brokers supporting Norbert
- Questrade: yes, free, popular
- Wealthsimple Trade: yes since 2023, free
- Disnat (Desjardins): yes
- RBC Direct, TD Direct: yes but ask advisors
5. Risks
Price risk: between DLR.TO buy and DLR.U.TO sell (1-3 days), price varies (typically < 0.1%). Negligible.
6. When to use
Conversion over $5,000. Below, commissions and time don’t justify. Useful for repatriating USD after US stock sales.
Frequently Asked Questions
Is Norbert’s Gambit legal?
Yes, completely legal in Canada. Common practice among savvy investors.
How long for conversion?
1-3 business days (journal entry time).
Need a special account?
No, standard brokerage with margin or cash + USD enabled.
Risk of loss?
Marginal: DLR price fluctuates < 0.1% typically. For $50k, max ~$50 risk vs $740 savings.