Norbert's gambit - Can$ to US$ or vice versa

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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by Arby »

ig17 wrote: 18 Jan 2018 22:25All you need to tell them is please journal 200 RY shares from sub-account -F to sub-account -H.
Same with me. That's the only instruction that I give them.
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by SQRT »

Arby wrote: 19 Jan 2018 09:36
ig17 wrote: 18 Jan 2018 22:25All you need to tell them is please journal 200 RY shares from sub-account -F to sub-account -H.
Same with me. That's the only instruction that I give them.
+2 never had a problem. Works best after settlement.
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by gsp_ »

tmo72 wrote: 18 Jan 2018 20:03 I used the shorting method to execute the gambit on TDW... shorted CM first on the USD side and bought it back on the CAD side. I did it in that order to avoid shorting against the box. But when I called in to journal the shares, the trader warned that I probably violated the rule anyways.

I shorted first as recommended on the wiki. Have the rules changed or was the agent mistaken? He said I should have called in to execute the gambit (for an increased fee).

I've executed the gambit this way before and didn't and didn't have a problem.
Did your trade span Monday(Martin Luther King holiday)? I received a similar warning when I foolishly didn’t notice a holiday before. Even though I shorted first chronologically, I bought first and then shorted when it came to settlement times.
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by tmo72 »

gsp_ wrote: 19 Jan 2018 16:30 Did your trade span Monday(Martin Luther King holiday)? I received a similar warning when I foolishly didn’t notice a holiday before. Even though I shorted first chronologically, I bought first and then shorted when it came to settlement times.
Nope — I placed the trades the day after MLK day.
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by strathglass »

DenisD wrote: 03 Apr 2017 00:19The answer depends on which broker you use. If your broker allows you to NG with two quick online trades (RBCDI, BMOIL, TDDI sometimes and possibly others), it's always best to use a high volume, low volatility, high priced inter-listed stock. High priced so the spread will be a lower percentage of the amount you want to convert.

If you have to call an agent to do the second trade at a higher fee (TDDI sometimes and possibly others), it depends on the length of time you have to wait for an agent and the amount you want to convert. If you have to wait too long, the price of something like RY could change. For higher amounts, the lower trading costs of RY could compensate for the higher fee.
OK, so I understand if you use a rep to do your sale then TD DI is not consistent regarding the fee for the phone-executed trade on the second transaction in the gambit...so maybe you have to be lucky to get the $9.99 online fee. Also using the above procedure you may have to wait to get a TD DI rep during which time the stock can be moving on you before you've completed the second step of the gambit.

But I would think the following procedure should always work to get you the $9.99 fee for both ends of the gambit and with quick execution to avoid any significant stock movement (assume CAD$ to US$ example, assume RRSP account, assume available cash in CAD$ account to cover what you want to convert to US$):
  1. call in to get a TD DI rep on the line and ask him to wait while you execute your purchase
  2. buy (online) Royal Bank in your CAD$ RRSP
  3. wait for order to be fulfilled
  4. tell the TD rep to now immediately journal those Royal Bank shares over to your US$ RRSP account
  5. sell (online) that Royal Bank stock now in your US$ RRSP account (I think you need to log out and in again to see it after step 4).
The above steps from buy to sell should be able to be completed in a couple minutes max, assuming you had the TD DI rep waiting on the phone to immediately journal the shares over after the purchase.

Am I missing something or does the above procedure look correct?
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by SQRT »

The only question I would have is whether they will journal the shares prior to settlement?
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by pmj »

I've previously suggested using a dual-listed stock that one already owns.
Journal it in advance, then there are no steps that require calling TDDI during the gambit. The exchange rate would still be crystallized at the time of the gambit.
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by SQRT »

pmj wrote: 27 Jan 2018 09:08 I've previously suggested using a dual-listed stock that one already owns.
Journal it in advance, then there are no steps that require calling TDDI during the gambit. The exchange rate would still be crystallized at the time of the gambit.
This works of course but you need to want to sell that stock. See an earlier post of mine where I describe how I mistakenly sold an inter listed stock on the US market instead of the Canadian. Ended up being an inadvertent gambit. I don’t see how it matters when you make the phone call to journal the shares as long as it is by settlement date.
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by adrian2 »

SQRT wrote: 27 Jan 2018 10:58
pmj wrote: 27 Jan 2018 09:08 I've previously suggested using a dual-listed stock that one already owns.
Journal it in advance, then there are no steps that require calling TDDI during the gambit. The exchange rate would still be crystallized at the time of the gambit.
This works of course but you need to want to sell that stock.
This works seamlessly in a registered account, and no, you don't need to want to sell the stock.

To be more clear:
Say you own 1000 TD shares in your CAD RRSP sub-account -S.
You call in advance of the gambit, non time critical, to journal the shares (all or part) to the USD side -U (you're careful not to do it close to the ex-dividend date).
When you decide to pull the trigger, sell the shares in the -U sub-account and within seconds buy them back on the -S sub-account.

Been there, done that.
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by SQRT »

adrian2 wrote: 27 Jan 2018 11:14
SQRT wrote: 27 Jan 2018 10:58
pmj wrote: 27 Jan 2018 09:08 I've previously suggested using a dual-listed stock that one already owns.
Journal it in advance, then there are no steps that require calling TDDI during the gambit. The exchange rate would still be crystallized at the time of the gambit.
This works of course but you need to want to sell that stock.
This works seamlessly in a registered account, and no, you don't need to want to sell the stock.

To be more clear:
Say you own 1000 TD shares in your CAD RRSP sub-account -S.
You call in advance of the gambit, non time critical, to journal the shares (all or part) to the USD side -U (you're careful not to do it close to the ex-dividend date).
When you decide to pull the trigger, sell the shares in the -U sub-account and within seconds buy them back on the -S sub-account.

Been there, done that.
Ok right. All my accounts are taxable so wasn’t thinking about RSP.
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by strathglass »

strathglass wrote: 27 Jan 2018 00:42
DenisD wrote: 03 Apr 2017 00:19The answer depends on which broker you use. If your broker allows you to NG with two quick online trades (RBCDI, BMOIL, TDDI sometimes and possibly others), it's always best to use a high volume, low volatility, high priced inter-listed stock. High priced so the spread will be a lower percentage of the amount you want to convert.

If you have to call an agent to do the second trade at a higher fee (TDDI sometimes and possibly others), it depends on the length of time you have to wait for an agent and the amount you want to convert. If you have to wait too long, the price of something like RY could change. For higher amounts, the lower trading costs of RY could compensate for the higher fee.
OK, so I understand if you use a rep to do your sale then TD DI is not consistent regarding the fee for the phone-executed trade on the second transaction in the gambit...so maybe you have to be lucky to get the $9.99 online fee. Also using the above procedure you may have to wait to get a TD DI rep during which time the stock can be moving on you before you've completed the second step of the gambit.

But I would think the following procedure should always work to get you the $9.99 fee for both ends of the gambit and with quick execution to avoid any significant stock movement (assume CAD$ to US$ example, assume RRSP account, assume available cash in CAD$ account to cover what you want to convert to US$):
  1. call in to get a TD DI rep on the line and ask him to wait while you execute your purchase
  2. buy (online) Royal Bank in your CAD$ RRSP
  3. wait for order to be fulfilled
  4. tell the TD rep to now immediately journal those Royal Bank shares over to your US$ RRSP account
  5. sell (online) that Royal Bank stock now in your US$ RRSP account (I think you need to log out and in again to see it after step 4).
The above steps from buy to sell should be able to be completed in a couple minutes max, assuming you had the TD DI rep waiting on the phone to immediately journal the shares over after the purchase.

Am I missing something or does the above procedure look correct?
SQRT wrote: 27 Jan 2018 04:09 The only question I would have is whether they will journal the shares prior to settlement?
Yes, that is the part that is a bit unclear. If no one here has an answer I will just have to call and ask TD about this approach.
But at this TD link, the description given by the TD rep is as follows:
TD_REP wrote:if you purchased POT (TSX), and wish to sell it in $USD (POT; NYSE), you will have to contact TD Direct Investing at 1.800.465.5463 and have an Investment Representative journal the stocks, then you can proceed to sell in $USD. At this time, if you hold POT (TSX), you just cannot sell it as POT (NYSE) without the journaling process be completed first.
Problem is that what the TD rep wrote doesn't say anything about the timing, but I was assuming the journalling he mentions can be done by the rep while you are on the phone with them, as soon as your purchase has been filled. Correct??
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by Peculiar_Investor »

strathglass wrote: 27 Jan 2018 12:20 Yes, that is the part that is a bit unclear. If no one here has an answer I will just have to call and ask TD about this approach.
But at this TD link, the description given by the TD rep is as follows:
TD_REP wrote:if you purchased POT (TSX), and wish to sell it in $USD (POT; NYSE), you will have to contact TD Direct Investing at 1.800.465.5463 and have an Investment Representative journal the stocks, then you can proceed to sell in $USD. At this time, if you hold POT (TSX), you just cannot sell it as POT (NYSE) without the journaling process be completed first.
Problem is that what the TD rep wrote doesn't say anything about the timing, but I was assuming the journalling he mentions can be done by the rep while you are on the phone with them, as soon as your purchase has been filled. Correct??
When I click on the link I get the following which involves a key difference which I'll explain below:
Chris V, Team Member wrote:f you purchased DLR (TSX), and wish to sell it in $USD (DLR; NYSE), you will have to contact TD Direct Investing at 1.800.465.5463 and have an Investment Representative journal the ETF, then you can proceed to sell in $USD. At this time, if you hold DLR (TSX), you just cannot sell it as DLR (NYSE) without the journaling process be completed first.
In your quoted example POT is an interlisted stock and key to Norbert's Gambit the CUSIP number, which is the same on both exchanges. In the Chris V example they are referring to DLR is is quite a different situation, there are two different securities involved.
Norbert’s Gambit at TD Direct Investing | PWL Capital wrote:the Horizons US Dollar Currency ETF. This ETF – which is equivalent to holding US cash – is available in two versions. Both trade on the TSX, but the first, with the ticker symbol DLR, is bought and sold in Canadian dollars, while the second, DLR.U, trades in US dollars.
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by strathglass »

I don't care about DLR...I would do this with Royal Bank etc. (same CUSIP on both exchanges).
So does the TD rep journal over RY shares from CAD$ account to US$ account using the just-filled order, all while I wait on the phone with them? If the answer is yes then the maneuver is a trivial one in a TD DI account it would seem.
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by BRIAN5000 »

Next Monday is a holiday In some provinces and the US you may have longer settlement days if your doing a gambit.
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by thgeone »

I'm going to have to exchange some CAD into USD in my non-registered cash account at BMOIL.

Is there a guide to do this? Some people here have posted about how it takes ~4 min. Can it be done without calling a trader to journal the shares? Also, will the trader charge me any fees?

I've used this video for reference:

Is there anything else I should know before going ahead with it?
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by ig17 »

thgeone wrote: 26 Feb 2018 14:55 I'm going to have to exchange some CAD into USD in my non-registered cash account at BMOIL.

Is there a guide to do this? Some people here have posted about how it takes ~4 min. Can it be done without calling a trader to journal the shares? Also, will the trader charge me any fees?

I've used this video for reference:

Is there anything else I should know before going ahead with it?
The video you linked used DLR / DLR.U for the gambit. DLR is not a dual-listed stock. It's an ETF that trades in both currencies on the TSX. I believe that is the reason why they had to call a trader in Step 2.

I did a gambit at BMOIL a couple of weeks ago. I used BNS as my carrying stocks. I did everything online in a few minutes. Buy in the Canadian market, sell immediately in the US market. There was no need to call a trader for Step 2. Remember to select US Market and US Dollar settlement funds when you sell.

I did call them the next day (T+1) to request a journal on the settlement day (T+2). As far as I know, this call is not really necessary at BMOIL. Their system automatically flattens the long and the short. However, I read here and elsewhere that, sometimes, it charges a margin interest. I called just in case, to avoid the interest charge.
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by queerasmoi »

ig17 wrote: 26 Feb 2018 18:51 The video you linked used DLR / DLR.U for the gambit. DLR is not a dual-listed stock. It's an ETF that trades in both currencies on the TSX. I believe that is the reason why they had to call a trader in Step 2.

I did a gambit at BMOIL a couple of weeks ago. I used BNS as my carrying stocks. I did everything online in a few minutes. Buy in the Canadian market, sell immediately in the US market. There was no need to call a trader for Step 2. Remember to select US Market and US Dollar settlement funds when you sell.

I did call them the next day (T+1) to request a journal on the settlement day (T+2). As far as I know, this call is not really necessary at BMOIL. Their system automatically flattens the long and the short. However, I read here and elsewhere that, sometimes, it charges a margin interest. I called just in case, to avoid the interest charge.
Both DLR and DLR.U have the same CUSIP number (44049C401) so while it's not a stock per se, shouldn't it follow the same rules as any interlisted traded security?
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by ig17 »

queerasmoi wrote: 26 Feb 2018 21:08 Both DLR and DLR.U have the same CUSIP number (44049C401) so while it's not a stock per se, shouldn't it follow the same rules as any interlisted traded security?
At BMOIL, you can buy an interlisted stock in one market (Canadian or US) and immediately sell it in another market (US or Canadian). According to Justin Bender, the same steps don't work with DLR / DLR.U; you have to call a trader in order to sell. I don't know why, but probably because DLR and DLR.U both trade on the TSX.


PWL Capital guide to Norbert’s Gambit at BMO InvestorLine:

https://www.pwlcapital.com/en/Advisor/T ... vestorLine
The simplest way to do Norbert’s gambit is with the Horizons US Dollar Currency ETF. This ETF – which is equivalent to holding US cash – is available in two versions. Both trade on the TSX, but the first, with the ticker symbol DLR, is bought and sold in Canadian dollars, while the second, DLR.U, trades in US dollars (Note: Some investors prefer to use interlisted securities to implement the gambit, as this avoids the need to speak with a trader at BMO InvestorLine).
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by ockham »

Did a NG at BMOIL earlier this morning using Royal Bank. Market buy order in Toronto filled at 10:36 a.m. Market sell order placed and filled in New York at 10:37 a.m. Over and done. Could not be easier.
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by DenisD »

So I guess ockham should use Thursday's exchange rate to calculate the CAD proceeds and determine the gain or loss of the NG? Nice. :(
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by thgeone »

ig17 wrote: 26 Feb 2018 18:51
thgeone wrote: 26 Feb 2018 14:55 I'm going to have to exchange some CAD into USD in my non-registered cash account at BMOIL.

Is there a guide to do this? Some people here have posted about how it takes ~4 min. Can it be done without calling a trader to journal the shares? Also, will the trader charge me any fees?

I've used this video for reference:

Is there anything else I should know before going ahead with it?
The video you linked used DLR / DLR.U for the gambit. DLR is not a dual-listed stock. It's an ETF that trades in both currencies on the TSX. I believe that is the reason why they had to call a trader in Step 2.

I did a gambit at BMOIL a couple of weeks ago. I used BNS as my carrying stocks. I did everything online in a few minutes. Buy in the Canadian market, sell immediately in the US market. There was no need to call a trader for Step 2. Remember to select US Market and US Dollar settlement funds when you sell.

I did call them the next day (T+1) to request a journal on the settlement day (T+2). As far as I know, this call is not really necessary at BMOIL. Their system automatically flattens the long and the short. However, I read here and elsewhere that, sometimes, it charges a margin interest. I called just in case, to avoid the interest charge.

So I just buy RY/BNS on the Canadian market, and then sell the same # of RY on the US market, and choose USD. They then journal the shares over automatically and remove my short position? Sounds so simple... any gotchas?

Do we lock in the CAD/USD rate the second we sell the stock on the US market?

Also, the idea to use RY/BNS over DLR is to reduce bid/ask spread cost right? We are taking on the stock risk though. Any other reasons why using interlisted stocks seems more popular than using DLR/DLR.U?
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by ig17 »

thgeone wrote: 01 Mar 2018 18:28 So I just buy RY/BNS on the Canadian market, and then sell the same # of RY on the US market, and choose USD. They then journal the shares over automatically and remove my short position? Sounds so simple... any gotchas?
They may charge you margin interest. It's not clear when/why they do that... the charges are not consistent. Call them on T+1 to request a journal. If they still charge you interest, call again to reverse it.
thgeone wrote: 01 Mar 2018 18:28 Do we lock in the CAD/USD rate the second we sell the stock on the US market?
Yes.
thgeone wrote: 01 Mar 2018 18:28 Also, the idea to use RY/BNS over DLR is to reduce bid/ask spread cost right? We are taking on the stock risk though. Any other reasons why using interlisted stocks seems more popular than using DLR/DLR.U?
The main idea is to do both trades online. You need to call to sell DLR.U which is an inconvenience. You also need to convince them to apply the reduced online commission to a phone trade. But yes, you can reduce the spread if you use a stock.
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by thgeone »

ig17 wrote: 01 Mar 2018 18:48
thgeone wrote: 01 Mar 2018 18:28 So I just buy RY/BNS on the Canadian market, and then sell the same # of RY on the US market, and choose USD. They then journal the shares over automatically and remove my short position? Sounds so simple... any gotchas?
They may charge you margin interest. It's not clear when/why they do that... the charges are not consistent. Call them on T+1 to request a journal. If they still charge you interest, call again to reverse it.
thgeone wrote: 01 Mar 2018 18:28 Do we lock in the CAD/USD rate the second we sell the stock on the US market?
Yes.
thgeone wrote: 01 Mar 2018 18:28 Also, the idea to use RY/BNS over DLR is to reduce bid/ask spread cost right? We are taking on the stock risk though. Any other reasons why using interlisted stocks seems more popular than using DLR/DLR.U?
The main idea is to do both trades online. You need to call to sell DLR.U which is an inconvenience. You also need to convince them to apply the reduced online commission to a phone trade. But yes, you can reduce the spread if you use a stock.
Interesting, thank you!

Do you normally split up your trades when dealing with large amounts? i.e. buy in 50-100k intervals instead of trading all at once?
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by ig17 »

thgeone wrote: 01 Mar 2018 19:24 Do you normally split up your trades when dealing with large amounts? i.e. buy in 50-100k intervals instead of trading all at once?
I don't deal with large amounts. My typical gambit is 25-40K.
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Re: Norbert's gambit - Can$ to US$ or vice versa

Post by leoc2 »

ockham wrote: 27 Feb 2018 11:46 Did a NG at BMOIL earlier this morning using Royal Bank. Market buy order in Toronto filled at 10:36 a.m. Market sell order placed and filled in New York at 10:37 a.m. Over and done. Could not be easier.
Be sure to check your transaction history. BMOIL charged me interest (like a margin account interest, I think). I have done several gambits without this charge appearing and the last one I did in December it appeared. I called in and it was easily reversed. The CSR didn't know what triggered the charge. It was a minimal charge.
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