Norbert’s Gambit: The Best Way to Buy US Dollars

Nobody likes to throw away money, but that is what it may feel like when you’re converting currencies. Banks and brokers take a hefty sum off the top when you are exchanging your CAD for USD or vice versa.

Luckily, there is a way to drastically reduce the amount you shell out in currency exchange. In this article, we will share a little hack called the Norbert’s Gambit to keep your hard-earned money out of the bankers’ hands.

What Is Norbert’s Gambit?

Norbert’s Gambit is a legal currency conversion technique which allows an inexpensive conversion of CAD to USD and vice versa. The benefit of this technique is that it helps you exchange currencies without incurring a currency spread that brokerages will charge.

an individual Depositing money

The method can be executed by purchasing interlisted stocks or dual-currency exchange-traded funds (ETFs). It is important to choose an interlisted stock that is fairly liquid, such as a large Canadian bank or resource company. Having a liquid stock ensures the effective conversion is close to the spot rate.

Norbert’s Gambit works best when working with amounts between $10,000 and $1,000,000. With anything under $10,000, you are better off shopping at local banks or exchange offices.

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Where Can Norbert’s Gambit Be Performed?

To perform Norbert’s Gambit, find a Canadian discount brokerage. You can then open one of the following:

  • Non-registered account: These accounts usually have subaccounts that will house both Canadian and American dollars. You should be able to use the CAD account to trade Canadian stocks like Blackberry or Shopify, while the USD account will be able to trade American stocks like Amazon or Walmart.
  • Registered account: Norbert’s Gambit can be done with registered accounts. If your registered Canadian dollar account does not have American dollar subaccounts, you will need to “wash” the US dollars into a USD money market fund or USD stock you want to own.

How to Use Norbert’s Gambit in 6 Steps

Are you ready to get started with your currency conversion? Check out the following basic steps. To make it easy, our example will include a non-registered brokerage account.

  1. Open a discount brokerage account.
  2. Deposit your Canadian dollars.
  3. Buy interlisted stocks or ETFs with your Canadian dollars.
  4. Call your discount broker immediately and have them “journal” the Canadian shares to your US dollar account. This won’t cost you anything.
  5. It should take about 2 days for the trade to settle and show up in your US account.
  6. Sell the same number of shares on the NYSE and settle in American dollars. You’ve completed your Canadian dollars to American dollars exchange!

The whole process of Norbert’s Gambit typically takes three business days from the opening of your first Canadian trade to the US dollars in your hand. It may take a little longer, but this is not the norm.

If you want to perform Norbert’s Gambit for USD to CAD conversions, simply start with USD and do the same steps listed above.

How Much Does Using Norbert’s Gambit Save?

When you use Norbert’s Gambit, it costs you two trading commissions as well as the bid-ask spread. An average transaction charges $4.99 a trade and a typical bid-ask spread will be between $0.01 to $0.04 per share. Compare that to the 1-3%+ that is charged by a bank or broker to exchange your funds!

As an example, let’s take a look at someone who is trying to convert 10,000 Canadian dollars into US dollars. Using an average brokerage conversion fee of 2%, which would come out to a hefty $200 just to convert your money.

But if you instead applied Norbert’s Gambit, your two trading commissions would add up to $9.98 and the bid-ask spread will more than likely only add up to a couple of dollars. This means you save somewhere between $185-and $190, a saving of around 93%!

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What is DLR ETF?

DLR.TO stock is the Horizons US Dollar Currency ETF that reflects the price of the US dollar and net expenses of investing in US cash and its equivalents. This ETF is represented in CAD.

bank counter

Additionally, there is a US dollar version of DLR, called DLR.U. It has the same purpose but is priced in USD. The two ETFs have the same CUSIP, making them equivalent to an interlisted stock but are both traded on TSX.

The main benefit of using the DLR.TO stock is that it generally does not lose or gain in market value as much as other stocks. This makes it more predictable since the amount you know you’ll be getting is “locked in”. However, you must journal the units over immediately after your purchase because the price can change.

Some brokerages offer commission-free ETF trading, which will make DLR/DLR.U even cheaper for you to use because there is no transaction charge. Examples are both TD Easy Trade and RBC Direct Investing.

Next, we will show you exactly how to do Norbert’s Gambit through both of these brokerages.

Norbert’s Gambit: TD Direct Investing

Here are the steps to execute Norbert’s Gambit with TD Direct Investing brokerage:

  1. Set up a dual-currency account.
  2. Purchase DLR.TO on TSX.
  3. Wait for funds to show up in your account, typically 2 business days.
  4. Contact the brokerage to have the shares journaled to DLR.U.TO into your USD account.
  5. Sell DLR.U.TO on TSX.
  6. Access your money.

Norbert’s Gambit: RBC Direct Investing

Now let’s take a look at the procedure over at RBC:

  1. Buy DLR.U on TSX.
  2. After the transaction is filled, sell DLR on TSX.
  3. After the transaction has settled, get your money.

Finishing Thoughts

Norbert’s Gambit is the best way to convert CAD to USD for large sums of money. You can forego large commission fees of banks and forex, instead of only paying small trade fees and bid-ask spread. If you use DLR/DLR.U, you may be able to save even more through ETF trading without the transaction fees of some brokerages.


When is Norbert's Gambit worth it?

Norbert’s Gambit is worth it when converting amounts between $10,000 and $1,000,000.

How to use Norbert's Gambit on Questrade?

To perform Norbert’s Gambit on Questrade, first purchase DLR.TO on the TSX, wait for the transaction to settle, then sell DLR.U.TO on the TSX, and get your money.

How long does Norbert's Gambit take?

Norbert’s Gambit typically takes 3 business days.


Despite her formal background in linguistics, Maja has always been fascinated by the world of finance. She has spent years and years analyzing the market, including trades, investments, pitfalls to avoid as well as the stock exchange. As of recent, she has been studying some non-mainstream stocks in Canada. When I’m not immersed in numbers, I like to spend time with my dog and plan my next trip.

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