Norbert's Gambit at Questrade | DIY Investing with Justin Bender

[@SlamDunc_an]

This video saved me literal 100s of dollars. Thank you!

[@PositiveInvesting]

I do this a couple times a month. This is the best way to convert to usd and not pay ridiculous fees.

[@holdened]

do you lose a lot if you just buy the US shares outright from Questrade for something like $10k cad? Sometimes I would like to purchase the US shares but then I have to wait for this journaling to go through which will take 4 days that could change the prices quite a bit. Btw your channel is great stuff mate. Been following your investing episodes recently.

[@tristanwearethree]

You can but Questrade charges their currency conversion fee. On $10k, that's $200.

[@hamzak7261]

Is it worth it to do this for less than $1000?

[@yang319]

@@hamzak7261 yes it is. they charge you 2% fees. You should always use the Norbert's gambit method.

[@ghuman83]

how can you convert a USD in TFSA into CAD?

[@vexator19]

January 2020. It still works.

[@uchihasurvival]

Thanks! I am going use this trick this week.

[@financiallyinvested679]

This is amazing. I’m going to try this myself, thank you! You’ve earned yourself a subscriber!

[@JustinBenderCPM]

Financially Invested - Glad you like it - good luck!

[@davewave36]

An EXTREMELY important caveat you failed to mention was the timing of doing this gambit. If you do it while the US dollar is falling vs the Can dollar, you will get hit with a P&L Arbitrage Loss while your money is trapped in the 5 day period going from DLR.TO to DLR.U.TO until the DLR.U.TO is sold for settlement in cash. So if anyone is going to go from Can to US, do it while the Can dollar is going down vs the US dollar, and the reverse when going back to Canadian.

[@lukehill939]

This. @Justin Bender: you need to mention this in your video

[@teacher_jamiee4642]

Thanks for that gold advice! I actually just held on to DLR.TO for a while and made $300 ha

[@grad4394]

How will you know what the dollar is going to do during that 5 day period? and he said that it's probably only one day to do this in 2018? if I understood this correctly ?

[@jakekwon8276]

Did anyone do this with "market" as the Order type?

[@BrentsTreehouse]

if you KNOW what the currency will do, then you should be a currency trader and get rich that way.

[@romiguma]

Also, in a non-registered account, if you don't want to wait, you can short DLR.U.TO and use the cash immediately, and the short position will become covered as soon as the shares are journaled over. It will cost a couple days interest, but you avoid changes in currency or market prices, which may or may not work in your favour.

[@brockmckinney]

Isn't this only true if Questrade has enough inventory for you to do so, which may not be the case?

[@anguswiebe]

Quick and to the point... Thanks!

[@JustinBenderCPM]

@Angus Wiebe: You're very welcome!

[@brendenmcmahon2023]

Thank you you just saved me hundreds !!!

[@IBfreshTV]

Hi Justin, once you have the USD balance in your Questrade account, can you withdrawal the USD to your Canadian Bank Account using an EFT? Or do you need to do the reverse of the Gambit?

[@avsforthecup74]

I'd also like to know this! Assuming it'd be best done through a margin account?

[@IBfreshTV]

I asked people at Questrade, they said only way to know is by asking your bank. Questrade will not convert the USD balance to CAD before it goes into bank account. The USD balance will either be accepted by bank and USD converted to CAD by bank or it will be rejected. Only way for USD funds to surely go into Canadian bank account is if the account is denominated in USD to begin with.

[@fupopanda]

Ask your bank. Questrade won't know. I asked my bank and they said no because I only have CAD accounts with them.

[@kinitex]

Does it still take 4-5 business days? Is there anyway of speeding it up?

[@MakingofaMillionaire]

Great Video... When I eventually want to cash out my USD ETF's I assume we can do the inverse to cheaply get the cash converted to CAD?.... Also on a $2,000 trade do we know how much we are saving through this method versus the conversion fees?

[@blizzard762]

Yes it works the same in reverse. Here's an example: forums.redflagdeals.com/just-completed-norbert-gambit-questrade-2088027 Questrade's standard conversion fee is 2%, so you'd pay $40. With Norbert's Gambit, the fee is only ~$6 for the sell commission.

[@JustinBenderCPM]

@Ben Le Fort: Generally, you shouldn't use the gambit unless you are converting more than $3,000 (I prefer $5,000 as a minimum).

[@hamzak7261]

@@JustinBenderCPM Why is that?

[@ThaDraGun]

@@JustinBenderCPM Yeah why only do it for large amounts? If I want to change over $2000 it would save me $40. Not a whole lot, but would add up if done a few times. Is there a disadvantage to this method????

[@davidmurrell403]

@@hamzak7261 Percentages. 2% of $3000 is a larger chunk of cash than $1-2000

[@situzifeng]

QuesTrade is a pretty good platform normally for most trades with the comissions being somewhat low. However it ECN fees gets a little crazy when you start buying very large volumes. I was buying over 8000 units of DLR.TO for norberts gambit and the purchase costed $30 CAD in ECN fees and the sale costed $40 USD in ECN fees. This cost is still less than the normal exchange cost, but way more than the regular fixed commission of $10 CAD and $10 USD most banks charge for the trades. this expensive trading cost for DLR.TO really hurt, but I guess the lower cost of buying normal stocks makes up for it.

[@parsiprince]

Hi @Justin Bender, after we've completed the gambit, purchased USD stocks, and then sold the USD stocks, how do we exchange the funds back into CAD? Can you reverse the Gambit (i.e. purchase DLR.U.TO and ask to journal to DLR.TO)?

[@JustinBenderCPM]

@parsiprince: That's correct - you can also do the gambit in reverse to exchange USD for CAD.

[@evadeanu1]

Thank you

[@Mr.Be93]

I'd like to convert my USD margin acc back to CND. How do I do a "reverse" norberts gambit on QT? Thank you.

[@TheEpicDartfish]

I'd assume you do it the other way around

[@Veeetz]

Hey Justin, Thanks for the great video as always! Just wanted to add an addendum to this, as I think your followers would be interested. In addition to calling Questrade, you can also email them. I've only ever done 2 NG's before, but both times I emailed Questrade requesting them to journal over DLR.TO to DLR.U.TO and this has always been their boilerplate response to me, "Thank you for contacting Questrade, I will be happy to help you with this. Please be advised that the journal request has been created. It usually takes 3 business days for shares to settle and then journal request will take 1-2 business days to be processed. This is your case number for your reference xxxxxx." Can't wait for your other Questrade videos :) All the best Justin!

[@JustinBenderCPM]

@Vito C: I'm glad you're enjoying the videos. Thank you as well for your additional feedback about emailing rather than phoning (I think most investors would likely prefer the email method ;)

[@imbeaug74]

Does this still work? Would they ever stop letting people perform this type of transaction?

[@playerf]

No, because other platforms let you do this without even calling support (like TD Ameritrade). Other brokers even have a special menu for it.

[@Kuanyin3]

How were you able to pay only $0.52 in commission? Commission is 5 to $10

[@simonqi1525]

wondering this too? how long does journaling take now in 2020?

[@SalimMoorani]

ETF commissions are much lower, pennies per share verses the $4.95 minimum

[@miltonbates6425]

That's because its technically not a commission fee. That charge is an ECN fee (Electronic Computerized Network fee) which is a very small charge that the trading system automatically applies when journaling shares. If you wanted to journal hundreds of thousands (or millions) of shares, it would be a significant amount of money and might not be more cost-effective, in that scenario.

[@takanoritoriyama]

do i need to wait for the order to go through first before calling questrade?

[@zororo597]

wish to find this bit earlier...

[@AdventrureforAlan]

Question for you mate: 7th July i bought 364 units of @t at CAD $13.75 Then it takes a few days for them to be journaled over to @t How do I know what USD price to sell my @t at? The price of @t might change in the few days it took to journal them over? And I might be better or worse off If I sell at whatever the market price is? Or I have to wait, possibly a long time for my @t to sell if I set a limit sell price. When I go into my QT account and go into my TSFA account and click on "positions" I can see my @t holdings and it says "average price" is "10.12" which I assume is the price I paid but in USD... then in the next column it says "price" "10.105" which I assume is the current USD market price. Then under P&L it says in red "(5.46) which I guess means if I sell all my @t at the 10.105 market price, I will have a loss of USD $5.46... is that correct? Then I have the USD $4.95 commission for the sale of @t so a combine cost to get my USD cash to buy a US stock is USD $10.41 or about CAD $13.92

[@ThaDraGun]

Can this be done with TFSA Accounts as well?? I know they are meant only for long term investments. Wasnt sure if this would be considered day trading and cause a problem with the CRA.

[@ijirving]

There is no such thing as being flagged as a day trader in Canada

[@ThaDraGun]

@@ijirving So you can buy sell as much as you want even with a TFSA? I read that if you buy and sell too much you will have to pay tax on it.

[@mishaluna163]

Why not just buy UDS through an exchange (they don't charge any fees) and deposit in your questrade account? Would't that be done faster?

[@sameeramin5316]

@Misha Luna Questrade only accepts money from CAD accounts

[@vt824]

So does this just ultimately avoid the 1.5% currency exchange fee?

[@jakekwon8276]

Great video. Under "Order type", why not place a market order instead of a limit order? (what if the US dollar goes down against the CAD)?

[@JustinBenderCPM]

@Jake Kwon: I don't see what the US/Canadian dollar have to do with the decision to place market orders vs. limit orders.

[@anthonycho6344]

Never place market orders ever.

[@lmlmlmlm7627]

@@anthonycho6344 why?

[@levioliver3794]

Thing to remember here as well: If you are looking to go after a US Stock that’s running, you could end losing after 3-5 business days if the stock jumps. $1000 will cost you $20, but let’s say you were going to buy 10 stocks and those stocks end up $5 over that time. You gave up $50 to save $20.

[@AJ-jk7jn]

Isn't there an extra settlement period after selling shares in a cash account? I think it's 2 business days before you can buy again with those funds.

[@weihe2137]

Hi Justin, I convert the USD to CAD. I have "reverse" norberts gambit the DLR.U.TO to DLR.TO. but it is still show it is us dollor in DLR.TO.

[@Ayman1017]

With the usd money can you only buy etfs? Or can you get single stocks too

[@JustinBenderCPM]

@Ayman Shkukani - You can buy single stocks too.

[@felixleclair808]

Hi! Is this still working?

[@blanco4195]

im looking to transfer around 50 k , as per your graph i would save something like 970 cad using NG method ? im using ibkr.. thx a lot

[@Naz-yi9bs]

What is the difference between journaling shares and Norbert's gambit?

[@t0mj0sh8]

Thx for the quick video!

[@JustinBenderCPM]

No problem!

[@usamashakil2536]

Has anyone lost money doing this? If it takes 5 days to journal and sell DLR.U.TO, and the market slumps (as its volatile these days) is there a high chance you can lose more than the 2% conversion rate which Questtrade charges?

[@FunnyAsian00]

2 years after, does this still work?

[@wtfisthis9192]

Yes

[@6ixcityraptorz]

@@wtfisthis9192 Does it still take 5 business days?

[@opufy]

@@6ixcityraptorz maybe WORST CASE I'd say, some say it's 2-3 business days

[@6ixcityraptorz]

Pro Pro Tried just a week ago, took 4 b-days

[@opufy]

@@6ixcityraptorz wowwwww, 4 b-days ago was actually my bday lol!

[@expressionsphotobooth5187]

What should the currency of settlement be set to?

[@priayief]

Helpful video. However, I have about $20,000 USD that I want to convert to CAD. Can I do this in reverse - i.e. buy DLR.U.TO then journal to DLR.TO then sell the DLR.TO shares?

[@JustinBenderCPM]

@Captain Ron: You sure can! The steps you outlined would be correct - let us know how it goes!

[@Brockashocka]

@@JustinBenderCPM Hi Justin thx for the great video. Questrade doesn't charge a fee to journal over the holding?

[@sameeramin5316]

@@JustinBenderCPM can I do this with my TFSA instead of RRSP?

[@jobsonsilva8032]

MAN YOU JUST SAVE MY LIFE $$$ GOD BLESS YOU LOL

[@ghuman83]

How can I convert USD to CAD in my TFSA and Margin account without charges?

[@JustinBenderCPM]

@Pardeep Singh - There's no free lunch with currency conversions, but the Norbert's gambit strategy is a relatively cheap option worth considering, as long as you are converting a large enough amount (say, more than $3,000). It also works in TFSAs or non-registered/taxable accounts.

[@JustinBenderCPM]

@@billb5379 - I believe I did understand the question. Why would @Pardeep Singh reference a TFSA in their question if they were concerned about capital gains taxation? Regardless, like any security sales in a taxable account, there are tax implications: canadiancouchpotato.com/2015/02/26/taxable-consequences-of-norberts-gambit/

[@jayb9779]

Can I do this to transfer my USD to CAD? I have a Robinhood account in the US and just moved to Toronto. Thanks!

[@JustinBenderCPM]

@Jay B - I'm not sure if the process works at Robinhood. If you can somehow transfer your USD from Robinhood to Questrade first (through a wire order or other transfer), you can convert USD to CAD at Questrade (by buying DLR.U and selling DLR). But watch out for wire fees or other costs.

[@Dave004]

Does Questrades "USD Settlement Preference" that converts CAD trades sold to USD apply an exchange fee? Doesnt mention this and sees like a way to convert.

[@BenHC]

I believe they charge 2.5%, but it is hidden in their exchange rate. Compare the exchange rate they offer to the spot exchange range to see why kind of spread they're using.

[@iUse2bGoOd]

On Step1, the ask price is 14.15 but bid is 14.14. MY open P%L right after is 0.75... So I lost 75cents? I guess I shoulda input 14.14 right? Sorry im a new investor.

[@FATTY099999]

If you do this in your TFSA, does it eat into your TFSA contribution limit?

[@divineosawe]

I don't think so because you are just buying and selling "shares". You have not withdrawn anything. Your contribution limit is only affected when you withdraw.

[@FATTY099999]

Thanks @@divineosawe!

[@summervibes9931]

Great video Justin, very rare to even find info on this topic. Wouldn't of known any other way. Question though, why was the commission 5.075 USD? I can't figure out the math because you didn't do market order so no ECN fee of 0.0035/share but it is a sale of ETF so $4.95CAD...where did the rest of the commission come from?

[@JustinBenderCPM]

@Summer Vibes: The sale trade was a marketable limit order, so it still had ECN fees applicable.

[@summervibes9931]

I'm sorry if I'm just missing something simple but from what I understand, since it's a limit order (adding liquidity) there is no ECN fee and since it's a marketable order (+100 shares) then there should be no fee according to their fee page. www.questrade.com/pricing/self-directed-investing/fees

[@JustinBenderCPM]

@Summer Vibes: Only a "non-marketable" limit order adds liquidity to the market. For example, if the bid price for DLR.U was $9.94, and I place a limit to sell 150 shares at $9.95, this would add liquidity (as it would not be filled right away, or maybe at all). In the video, I placed a limit order directly on the bid price of $9.94 (which makes this a "marketable" limit order) - it is expected to fill immediately, and will not add any liquidity.

[@summervibes9931]

Ahhh I think I understand, correct me if I'm wrong. I had the misunderstanding that as long as you didn't click "market" then you were adding liquidity which I now see is wrong. Since you put the "bid" price, it took away liquidity, there for activated the ECN fee? However, if you would of put the "ask" price then you wouldn't of have been charged ECN for adding liquidity? I really appreciate your time btw

[@summervibes9931]

ahah I just understood it too, thank you ! Really appreciate it, I literally just got my account funded so that I can make my first trade ever on Monday so I'm trying to learn as much as possible Thank you for your time

[@Lexyharlo]

What about US taxes. If I buy US stocks in my TSFA, will I get taxed by the US on my profits & dividends?

[@JustinBenderCPM]

@Stephanie Kaia: If you hold US stocks in your TFSA account, 15% of the dividends will be withheld by the US (and you will not be able to recover the taxes).

[@kristaylor7119]

You should only use RRSP with US equities to avoid 15% withholding taxes.

[@bsdgffishtuna5186]

if i want to buy a stock on the us market - does it only work if the same stock is traded on tse?

[@cherpintow]

You can buy whatever stocks on the US markets you want as long as your brokerage allows for it, and most should. You will need US dollars for the purchase. If you only have CAD, use the trick from the video to convert your money.

[@valueStocks]

How is this US money if it is traded on the TSX?

[@luissantamaria1364]

@justinbender do you need an american rrsp account or a roth ira account to do this?

[@vadermike7772]

no. and btw there is no such thing as an American rrsp. rrsp is only in Canada.

[@itsbeiko]

cant the price of the etf fluctuate withn those 5 days? what if it drops more than the QT conversion fees?

[@JustinBenderCPM]

@beiko - That's certainly a risk at Questrade. For this reason, I prefer brokerages that allow the DLR/DLR.U buy/sell transactions to be completed on the same trade, such as RBC Direct Investing and BMO InvestorLine.

[@rebeccam2]

It seems to me like you're getting the same amount as just converting it form CAD to USD anyway? Am I wrong?

[@JustinBenderCPM]

@TheCanadianGoose - I unfortunately do not understand your question - could you provide some specific details/numbers that you're referencing?

[@wallstreetbets1975]

I didn't understand the part where I have to wait a week until I can sell the shares.

[@staycaffeinatedyo]

is Norbert's Gambit always going to save money? is there a case where it is going to cause me to lose money during the process?

[@JustinBenderCPM]

@Xiaoyu Jiang: You can lose money implementing the Norbert's gambit if: a. You implement it incorrectly. b. Depending on the amounts involved, the commissions could outweigh the benefits. I tend to only use it for amounts above $3,000 CAD

[@vexator19]

Does the reverse work to convert US dollars back to Canadian dollars?

[@evilevan9687]

Yes just buy DLR.U.TO then journal to DLR.TO then sell the DLR.TO shares

[@cgheorgh]

DLR.U.TO journaled to DLR.TO (just the inverse). However you are no longer hedged in terms of currency doing it this way, the hedge only works CAD to USD. You will be exposed during the settlement and journal period. Quote "Now you will need to wait 2 business days for the trade to settle, and an additional 1-2 days for Questrade to journal the shares. "

[@Churuuu0]

I would use this tactic every time IF the whole process can be done in 1 or 2 business days.. remember, your stock can rise more than 2% within 5 business days, and the currency itself can fluctuate 2% in 5 business days. I use this tactic when buying ETFs..

[@michaelattallah6765]

DLR isnt there any more only DLR.U

[@JustinBenderCPM]

@Michael Attallah: That's the idea if you're converting Canadian dollars to US dollars (DLR has to be updated to DLR.U, so that you can sell DLR.U and have US dollar proceeds).

[@hamzak7261]

Is it worth it to do this for less than $1000?

[@anthonycho6344]

$20 USDCAD conversion fee for every $1000. Up to you.

[@90kapo]

thank you justin bieber, you are a legend. p.s: i also love your music

[@JustinBenderCPM]

@kaps_nico - And you haven't even heard me slappa da bass, man ;)

[@aswinghimire4835]

Hello Sir, I saw your KZbin video on Norbert's Gambit for Questrade. I performed this, I originally bought 139 shares of DLR.TO (the one on the TSE) and then called to 'journal' the shares over to DLR.U.TO (the US exchange). After a couple days when they journalled over my total equity was down. I put in $2000 into the account and had about $23 less than what I should have. Does this mean I got charged 2% conversion fees when I should not have. On my transaction history it says I deposited $2000 then bought shares and then journalled it at a conversion rate (is it supposed to say that last part). I would assume no because I am not converting anything I am just journaling over. Right now I have US funds in my account but the total CAD equity should still be $2000 or the US equity converted should be equivalent to the CAD equity. Please respond to my email as I am stressed. I greatly appreciate it

[@hotsauce0606]

It's possible the US dollar went down or the Canadian dollar went up, so you lost money on your equity in the time between buying the DLR.TO shares and selling the DLR.U.TO shares. Might want to check that?

[@Robert-zx2df]

Why limit order instead of market ?

[@vadermike7772]

1) to save on ecn fees, and 2) with a limit order you can control and guarantee the exact price of the trade.

[@taintedgraph]

any reason why you chose to transfer to RRSP account?

[@JustinBenderCPM]

@Tommy Lawrence: Holding US-listed ETFs in RRSP accounts reduce the foreign withholding tax drag on their dividends, so if I'm implementing the strategy, it is typically across CAD and USD RRSP accounts. You can also perform the gambit in other account types.

[@holdened]

what if you use it on non-registered accounts? Same thing? I know TFSA has the withholding tax.

[@BuyBBStonk]

I'm going to go ahead and SMASH that like button

[@JustinBenderCPM]

@GlennCocoGuitar - Not sure if you mean, you like the video, or hate it?

[@BuyBBStonk]

@@JustinBenderCPM Great video

[@hamzak7261]

Has anyone does this on Virtual Brokers?

[@hellomeloO]

How can I convert usd to cad

[@JustinBenderCPM]

@Hello Melo - To convert USD to CAD, you can just follow the opposite steps (i.e. buy DLR.U with your U.S. dollars, sell DLR to obtain Canadian dollars).

[@hellomeloO]

@@JustinBenderCPM is it possible with tfsa account?

[@JustinBenderCPM]

@@hellomeloO - For sure :) The Norbert's gambit strategy also works in TFSAs and taxable/non-registered accounts

[@hellomeloO]

@@JustinBenderCPM thank you so much

[@JustinBenderCPM]

@@hellomeloO - You're very welcome :)

[@redone729]

What about the fees?

[@joshiedL]

It's just your regular fees when buying and selling ETFs, but overall it's better than the 1.5-2% you pay when transferring money within Questrade

[@ahmadzaitoun3777]

Does this process still work in 2019?

[@JustinBenderCPM]

@Ahmad Zaitoun: As far as I know.

[@Sepharite]

Is this the best way?

[@JustinBenderCPM]

@Sepharite: It's one of the lowest cost ways (I use it with my clients all the time)

[@czapskibusinessgroup]

Is this still relevant?

[@JustinBenderCPM]

@Czapski Business Group - for sure!

[@czapskibusinessgroup]

@@JustinBenderCPM Alright, I'm new to this so its a bit confusing still lol. Still trying to figure out the tax implications with using a margin account for some potential day trade type investments

[@bongboyz6468]

You have no idea how many lives you changed

[@JustinBenderCPM]

@bong boyz - That might be a bit of an exaggeration ;) But thank you still :)

[@bongboyz6468]

@@JustinBenderCPM no man, take the credit. You keep popping up everytime i search for new investing strats in canada. I also only just realized I already know your material from your website/canadian couch potato - i just didn't know it was you!!! Like bro what the hell are you LOL

[@TipsterOnForex]

The fee now for exchaning is 0.5% so hardly worth the effort to do NG

[@JustinBenderCPM]

@Brian Tipster: Where are you getting this figure from? Would you please provide a link - thanks.

[@santiagov6428]

@Brian Tipster: The 0.5% is not accurate, I discussed with a Questrade representative today 12 of April, and the exchange CAD to USD on my margin account is "1.99 cents on the dollar". So it still worth it to do NG.

[@JustinBenderCPM]

@Santiago Valencia: That's also what I read on their website (around 2% CAD to USD currency FX rate)

[@3bjdarras]

@@JustinBenderCPM What about using something like Transferwise? It seems like the cost is around 1.25%. Isn't that much better or is there something I'm missing?

[@qicui3413]

Why not just do exchange via TD bank to USD then deposit to QT