I have a lot of US dollar assets in my retirement portfolio. I’m not really convinced it’s a good idea, but it has taught me the ins and outs of USD foreign exchange rates. Here I’m talking about getting access to (or changing from) US funds for the purposes of investing in your brokerage account. Getting access to US funds to buy things is a different¹ animal, one that I covered in a previous post.

Here’s a few things I’ve learned.

Google is your friend for real time foreign exchange (FX) rates

“1000 USD in CAD” is a terrific search term to get an instant FX rate. (also: Euro, GBP, THB…). This is as close as you’ll get for the absolute best FX rate and should serve as your target.

For most brokerages, foreign exchange is a profit center

Meaning: They’re making money every time you convert one currency to another, usually on the order of 1.5% a transaction. Some providers seem to go to great lengths to hide what rate they are using on any given transaction. (I’m looking at you, QTrade²).

There are exceptions in the brokerage community, to be sure.

• Interactive Brokers comes very close to the ideal rate for any sizable transaction³ and is the big winner when it comes to converting currency for investing purposes⁴⁵
• Wealthsimple recently introduced a tiered FX rate depending on how much you’re converting⁶:
  • Under $10k, 1.5%
  • Up to $25k, 1%
  • Up to $100k, 0.5%
  • Over $100k, 0%

The cheapest way to convert at most brokerages is to use Norbert’s Gambit

Norbert’s Gambit, in a nutshell, involves the following steps.

• Buy an interlisted Canadian stock or ETF in Canadian dollars. “Interlisted” means that the stock trades on both Canadian and US stocks exchanges. Most will suggest using Global X’s US Dollar Currency ETF, namely DLR/DLR.U, but I’ve also used Royal Bank (RY⁷). There’s a few lists out there that are periodically updated:
  • https://www.tsx.com/en/trading/toronto-stock-exchange/fee-schedule/ni-23-101 is one but only lists stocks, not ETFs
  • https://help.qtrade.ca/hc/en-ca/articles/10724325981723-What-is-a-dual-USD-and-CAD-currency-stock-trading-in-Canada is another but only seems to list ETFs and hasn’t been updated in a while
• Move the stock or ETF to the US side of your account⁸. The technical term for doing this is called “journaling” your shares.
• Sell the US stock on the US side of the account, and settle the trade in US dollars.
• Result: you get US dollars from the Canadian dollars you used in the first step, minus any fees^9,10.

I must say at this point that although the steps are reasonably straightforward, there are usually delays introduced at each step. For example, you probably have to wait a day for the initial trade to settle before making the journaling request. And journaling may not be instantaneous either¹¹.

With no guarantee that any of these are accurate, here are the specific steps to do the Gambit on a number of popular platforms.

• BMO Investorline: https://canadianportfoliomanagerblog.com/norberts-gambit-at-bmo-investorline/ (This is a really old video, the new platform doesn’t look like this and I don’t think you can buy DLR online using the new platform).Wealthsimple: It’s not supported, currently
• CIBC Investor’s Edge: https://benderbenderbortolotti.com/norberts-gambit-cibc-investors-edge/
• Interactive Brokers: not sure it’s supported, not required since FX is really good
• National Bank Direct: https://benderbenderbortolotti.com/norberts-gambit-national-bank-direct-brokerage/
• QTrade: https://www.looniedoctor.ca/2019/06/14/norberts-gambit-qtrade/
• Questrade: https://wealthsavvy.ca/norberts-gambit-questrade/
• RBC Direct: https://dividendearner.com/dlr-norbert-gambit/
• Scotia iTrade: https://www.shack.ca/blog/norberts-gambit-and-scotia-itrade/
• TD Direct Investing: https://forums.redflagdeals.com/does-norberts-gambit-still-work-tddi-2675063/

1. For most people. Since I am a CIBC USD savings account client, using Norbert’s Gambit is also a way for me to fund my USD shopping purchases. ↩︎
2. When attempting to buy a USD ETF from my Canadian account, the only indication I’m about to get fleeced is the warning message “The account funds do not match the market currency. Currency conversion and foreign exchange rates will apply.” No indication of what the exchange rate they are using. ↩︎
3. Their posted rates are very close to the google ideal, but there is a small (very small) minimum charge of $2 per trade per https://www.interactivebrokers.com/en/pricing/commissions-spot-currencies.php ↩︎
4. It’s not ideal for getting cash access for shopping since they have very long hold periods where you cannot withdraw your money. See https://www.interactivebrokers.com/campus/glossary-terms/withdrawable-cash-subject-to-origination-restriction/ for the details. ↩︎
5. But that web interface, wow is it ever complicated ↩︎
6. See https://www.wealthsimple.com/en-ca/legal/fees/trade for the details. You’ll need a Wealthsimple USD account to pull this off, of course, and the only kind of USD account Wealthsimple offers is non-registered. ↩︎
7. Did this at BMO Investorline since you cannot buy DLR online. Apparently you can buy it if you call in your order. At BMO using RY, I was able to get USD on the same day. ↩︎
8. HOW to do this will vary considerably depending on who your broker is. Best to Google for specific instructions involving your broker. ↩︎
9. Possibly for buying and selling the ETF, possibly a fee imposed for journaling, something Questrade is doing starting April 1, 2025. ↩︎
10. And minus (or plus) any changes in the price of the thing you bought. Depending on your broker, each step in the process may take a day or two. If you do the Gambit often enough, I figure this sort of thing just averages out. Sometimes you win, sometimes you lose. ↩︎
11. Per https://www.questrade.com/learning/investment-concepts/dual-listed-securities/journaling-shares it can take five (!) business days. ↩︎