Why Norbert’s Gambit Matters
Canadians investing in U.S. stocks or ETFs often encounter a frustrating issue: foreign exchange fees. Most brokerages quietly charge you 1.5% to 2.5% every time you convert CAD to USD or vice versa (see the online broker comparison for fees). On a $10,000 conversion, that’s $150–$250 gone instantly.
Norbert’s Gambit is the go-to strategy to avoid these hidden fees. It takes a bit of setup, but with a few extra steps, you can cut your cost to almost zero. With lower brokerage fees and faster settlement rules, Questrade is the cheapest broker to move your money across the CAD–USD line.
How Norbert’s Gambit Works (Step-by-Step)
The basic idea is simple: instead of paying your broker to convert your dollars, you use an interlisted security; a stock or ETF that trades on both the Canadian and U.S. exchanges.
The most popular choice is Horizons DLR / DLR.U:
DLR.TO — trades on the TSX in Canadian dollars
DLR.U.TO — trades on the TSX in U.S. dollars
👉 Both tickers are listed on the Toronto Stock Exchange (TSX). The only difference is the trading currency, which makes them ideal for Norbert’s Gambit.
Prerequisite: Dual-Currency Accounts
Before attempting Norbert’s Gambit, make sure your brokerage account supports both CAD and USD balances:
If your account doesn’t have a USD side, your broker will auto-convert the proceeds of your USD sale back into CAD at their retail FX rate defeating the entire purpose.
In registered accounts (RRSP, TFSA, FHSA), not every broker offers USD sub-accounts. Always confirm first (Learn more about each type of account).
The Playbook
Step 1 - Buy DLR.TO in CAD
Use your Canadian-dollar account to purchase DLR.TO.
Step 2 - Journal the shares to the USD side
Call or request through your brokerage to “journal” the position. This transfers your DLR.TO shares to the U.S. side of your account as DLR.U.TO.
Step 3 - Sell DLR.U.TO in USD
Once the shares settle, sell them in USD. You now have U.S. dollars in your account without paying the 1.5–2.5% FX spread.
You can reverse the process (buy DLR.U with USD → journal → sell DLR in CAD) to move money back to Canada.
Journaling Explained
The key step in Norbert’s Gambit is journaling; moving your shares from the CAD side of your account to the USD side (or vice versa).
What is journaling?
Journaling is an internal transfer your broker performs to “relabel” the same security in the other currency. For example, your DLR.TO shares (CAD) become DLR.U.TO shares (USD). You still own the same number of units, but now they’re held in the other currency sub-account.Who handles it?
You can’t journal shares yourself. You must request it from your broker. Some firms do it automatically, while others require a phone call or secure message.How long does it take?
Journaling usually takes one business day (T+1), but some brokers may take longer. Once complete, the position appears on the other currency side of your account.Does it cost money?
Most brokers offer journaling for free. The main exception is Questrade, which as of April 2025 charges $9.95 per journaling request.Tax impact?
Journaling does not create a taxable event. You’re not selling the security; you are just changing the account currency designation.
👉 Without journaling, Norbert’s Gambit doesn’t work. If your broker auto-converts currencies instead of journaling, you’ll lose the FX savings.
Journaling Policies by Broker
Broker | Journaling Policy | Fee |
|---|---|---|
National Bank Direct Brokerage (NBDB) | Manual request (online/phone) | Free |
Questrade | Manual request (secure message) | $9.95 |
Qtrade | Manual request (call or secure message) | Free |
RBC Direct Investing | Automatic | Free |
TD Direct Investing | Automatic | Free |
⚡️Quick take:
Easiest brokers: RBC, TD → journaling is automatic once settlement occurs.
Cheapest broker: NBDB → manual request, but no fees.
Most inconvenient: Questrade → you must submit a journaling request and pay $9.95.
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Costs & When It Makes Sense
Norbert’s Gambit isn’t “free”, but it’s close. Depending on how much you convert, you can save a substantial amount of money, and these savings add up over time.
Cost of CAD → USD Conversion by Broker (Including Trading & Journaling Fees)
Broker / Method | $1,000 | $5,000 | $10,000 | $25,000 |
|---|---|---|---|---|
National Bank Direct Brokerage (NBDB) | $0 | $0 | $0 | $0 |
Questrade | $9.95 | $9.95 | $9.95 | $9.95 |
Qtrade | $17.50 | $17.50 | $17.50 | $17.50 |
BMO InvestorLine | $19.90 | $19.90 | $19.90 | $19.90 |
RBC Direct Investing | $19.98 | $19.98 | $19.98 | $19.98 |
TD Direct Investing | $19.98 | $19.98 | $19.98 | $19.98 |
Scotia iTRADE | $19.98 | $19.98 | $19.98 | $19.98 |
Broker Auto-FX (~1.5%) | $15 | $75 | $150 | $375 |
Bank FX (~2.5%) | $25 | $125 | $250 | $625 |
Timing of Execution: Fast vs Slow Brokers
Another key factor is how quickly you can complete the Gambit.
RBC, TD → Journaling is automatic. Once your DLR.TO purchase settles, you can often sell DLR.U within minutes. At RBC, many investors report completing the entire Gambit in under 5 minutes.
Questrade → Journaling is manual. You must submit a request, and the process can take up to 5 business days before your DLR.TO shares appear as DLR.U. That’s multiple days of FX risk.
Qtrade / NBDB → Journaling is also manual, but typically clears in 1–2 business days. Faster than Questrade, but not instant like RBC.
Why Timing Matters (Example)
Suppose you buy CAD $10,000 worth of DLR.TO at an FX rate of 1.36:
Fast Broker (RBC, same-day)
Buy DLR.TO → Journal → Sell DLR.U immediately.
FX rate still ~1.36.
Net USD: ~$7,350
Slow Broker (Questrade, 3–5 days delay)
Buy DLR.TO at 1.36.
By the time your shares journal, CAD weakens and FX shifts to 1.39.
When you sell, you only get $7,195 USD.
That’s a $155 loss — more than the Gambit savings.
The opposite can also happen. Flip a coin.
👉 Key takeaway:
If speed and certainty are a priority, RBC Direct Investing is a safer option.
If cost is the top priority, NBDB and Questrade are cheap, but you take on more FX risk due to journaling delays.
Risks and Caveats
It’s not completely risk-free:
Price movement risk: Between buying and selling, the CAD–USD rate may move. With T+1 settlement, the window is smaller but still real.
Journaling risk: When converting USD → CAD, you’re exposed to a larger FX risk during the journaling delay. If the U.S. dollar weakens, you could lose more than you save.
Broker surprises: Some brokers may auto-convert currencies unless you set your account properly.
Manual effort: You need to call or request journaling at most firms.
Tax considerations: Journaling itself doesn’t trigger taxes, since you’re not realizing a gain/loss; you are just swapping between tickers representing the company.
Alternatives & Liquidity Notes
While DLR/DLR.U is the most common choice, it isn’t the only one:
Some investors use interlisted Canadian blue-chip stocks (like TD, BMO, or Shopify) to perform the Gambit.
Liquidity on these stocks is excellent, but the risk is higher because share prices move with earnings, news, and overall market sentiment. The potential impact of rapid share price change exists in addition to the exchange rate already in effect.
With DLR, the bid/ask spread is usually pennies, though in volatile markets it can widen. Using limit orders and a bit of patience helps.
👉 Why DLR is safer: Unlike individual stocks, which can jump on news unrelated to currency, DLR and DLR.U are designed to track the USD/CAD exchange rate directly. That keeps the outcome tied to FX movements alone, removing “stock risk” from the process. For most investors, this makes DLR the most predictable and reliable way to execute Norbert’s Gambit.
Account Setup Requirements
To use Norbert’s Gambit properly, you need to have both a CAD and a USD side within the same brokerage account:
Non-registered accounts: Most Canadian brokers let you open a single account with CAD and USD sub-accounts.
Registered accounts (RRSP, TFSA, FHSA, RESP): Not all brokers support USD sub-accounts for registered plans. If your broker doesn’t, any USD sale will be auto-converted back to CAD at their retail FX rate — defeating the whole purpose.
Check before you trade: Always confirm your broker allows USD holdings in the account type where you plan to do the Gambit.
👉 Without dual-currency support, Norbert’s Gambit won’t work.
Registered Accounts (RRSP, TFSA, FHSA)
Norbert’s Gambit works inside registered accounts too:
RRSP: Journaling is common, though you may need to request it directly.
TFSA & FHSA: Same mechanics apply — buy on the CAD side, journal, sell on the USD side.
Broker FX or Nortbert’s Gambit are your only options when your money is in the account already.
Alternative Ways to Journaling
Norbert’s Gambit is the cheapest, but it’s not the only game in town:
Wise (formerly TransferWise): Great for moving money between bank accounts internationally, but not as seamless for brokerage accounts, and you can’t use it in registered account.
Broker FX promos: Some firms occasionally run reduced FX fee offers.
Hold USD in advance: If you regularly buy U.S. stocks, consider keeping a USD cash balance.
Example Walkthrough
Say you want to convert CAD $10,000 into USD at Questrade:
Buy 600 shares of DLR.TO at ~$16.65 CAD = ~$10,000 CAD.
Request journaling to DLR.U.
Pay the $9.95 journaling fee.
5 business days later, sell DLR.U at ~$12.20 USD per share = ~$7,320 USD.
Effective FX rate: 1.3660
Compare to broker’s retail rate: ~1.3860
Savings: ~$145
Even with Questrade’s new fee, you pocket most of the spread.
FAQ
Is Norbert’s Gambit legal?
Yes, you’re simply buying and selling securities, nothing shady.
Does it work in RRSPs or TFSAs?
Yes. Journaling works in registered accounts too, though you must request it from your broker.
How long does it take?
Usually 1–2 business days with T+1 settlement.
What if I need money quickly?
Norbert’s Gambit isn’t ideal if you need USD tomorrow. Use it for planned conversions, not emergencies.
Final Thoughts
Norbert’s Gambit has been around for years, and despite some new fees, it remains the best way for Canadian investors to convert large amounts of money between CAD and USD.
The key is knowing your brokerage’s rules and testing the process before moving big sums. If you’re serious about saving on FX, the extra step is worth it.