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Norbert’s Gambit: How to Convert CAD to USD Efficiently

This Page's Content Was Last Updated: January 10, 2023
WOWA Trusted and Transparent

What You Should Know

  • Norbert's Gambit allows investors to reduce CAD/USD exchange rate fees.
  • You can save an estimated $224 on a $10,000 trade.
  • The process takes four to five business days to finalize.
  • To exchange CAD for USD, you'll need to buy DLR.TO and journal it to DLR.U.TO.
Nortberts Gambit Infographic

Norbert's Gambit saves currency conversion costs when exchanging Canadian dollars for USD. The process was invented to save Canadian investors money when buying stocks on United States exchanges. It's named after Norbert Schlenker, who created this method during his employment at Libra Asset Management.

The process involves buying a stock and selling it in another currency. This side steps the high fees that brokerages charge for currency conversion and thus improves your calculated stock profit. While Norbert's Gambit is a simple and efficient way to save money on currency conversion costs, it does involve some risk. Continue reading to learn the step-by-step guide to completing Norbert's Gambit and when not to use it.

Estimated Norbert’s Gambit Savings


Estimated on a $10,000 trade

Comparing Exchange Rate Fees

Norbert's Gambit vs. Standard Brokerage

Norbert's Gambit Explained

In most cases, your stock trading platform will charge a 2.5% currency conversion fee. You lose 2.5% of your money every time you convert CAD to USD. For example, you will lose $250 when converting $10,000 between the two currencies. This would especially apply if withdrawing from your RRSP homebuyers' plan to fund a home down payment.

Instead of paying a hefty fee, you can use Norbert's Gambit to get the prime exchange rate. The Gambit works using the Horizons U.S. Dollar Currency ETF (DLR.TO). This stock is listed on the Toronto Stock Exchange and trades in Canadian dollars. Its purpose is to index the CAD/USD exchange rate.

After purchasing DLR.TO, you must convert it over to the USD equivalent through journaling. You'll need to contact your broker and ask them to transition DLR.TO to DLR.U.TO. The latter trades in USD, meaning you switch the value of your Canadian-denominated stocks for the USD variant. This avoids the significant exchange rate fees that most brokerages charge. In summary,

  • To exchange CAD for USD: Buy DLR.TO and journal it to DLR.U.TO. Then Sell DLR.U.TO
  • To exchange USD for CAD: Buy DLR.U.TO, and journal it to DLR.TO. Then Sell DLR.TO

Norbert's Gambit Advantages & Disadvantages

  • Cost Savings
  • Flexibility
  • Simplicity
  • Five-Day Settlement
  • Exchange-Rate Risk
  • Minimum Exchange Value


  • Cost savings: Avoid the high fees that most brokerages charge for currency conversions. You’ll save money using Norbert's Gambit.
  • Flexibility: In most cases, the transaction will finalize without issues.
  • Simplicity: The three-step process is simple and easy to follow.


  • Five-Day Settlement: The process involves a five-day settlement period. You cannot access your converted funds for five business days.
  • Exchange-Rate Risk: Since your stocks are being traded in two different currencies, exchange-rate fluctuations during the settlement period can affect the value of your investment. The risk only applies when you are transferring USD to CAD.
  • Minimum Exchange Value: For the economics of Norbert's Gambit to make sense, it's best with trading volumes over $500 to $1,000 CAD.

Norbert's Gambit Example

Before using Norbert's Gambit, it's a good idea to calculate the amount of money you want to exchange and how much stock you will need. To do this, take the value of your CAD investment and divide it by the current value of DLR.TO. Let's assume DLR.TO is currently trading at $13.88.

For example: If you want to exchange $30,000 CAD, you will need: 2,161.38 DLR.TO shares (=$30,000 / $13.88). In most cases, investors will round up to the nearest whole number, resulting in 2,162 DLR.TO shares.

Next, you'll want to journal these shares to DLR.U.TO. At the moment, this trades at $10.16 USD per share. You will then transfer the 2,162 DLR.TO to DLR.U.TO. After the settlement ends, you will have $21,965.92 USD (=2,162*10.16) worth of stocks in your account.

This results in an effective exchange rate of 0.73199 USD per $1 CAD. At the time of writing, this is 0.061% lower than the prime USD to CAD exchange rate of 0.73244. Once everything has settled, you can sell the DLR.U.TO shares and receive USD cash in your trading account.

Keep in mind that this calculation doesn't include the various fees associated with the transaction. While minor, there are commissions and ECN fees. Additional pages calculate these fees add up to 0.2%. Overall, the total Norbert's Gambit costs are 0.261%, which is considerably lower than the 2.5% most brokerages charge for exchange fees. The process is different for each exchange and is explained in more detail below.

Step-By-Step Guide to Completing Norbert's Gambit

At its core, there are three steps to complete Norbert's Gambit. If you have CAD and want to transfer to USD, you'll have to;

  1. Buy DLR.TO
  2. Journal to DLR.U.TO
  3. Sell DLR.U.TO

The opposite is true if you're converting USD to CAD. You would buy DLR.U.TO and journal to sell DLR.TO. This section explains the nuances of each of the top brokerage platforms.


Questrade logo

Questrade is a Canadian online broker that supports Norbert's Gambit. The process will take around five days to receive USD cash in your account. After buying DLR.TO during trading hours, you can journal it to DLR.U.TO. To journal using Questrade, you must contact customer support through the chat feature, call, or email. You need to notify them of how many shares to journal and answer any security questions.

If using a registered account such as a TFSA or RRSP, there is an essential additional step. You must ensure the currency settlement setting is set to "currency of transaction." You can find this within Settings > Account Management > Currency Settlement.

As always, you can use the same procedure to exchange DLR.U.TO (USD) to DLR.TO (CAD).

TD Direct Investing


You'll need a dual-currency account to use Norbert's Gambit with TD direct investing. This can be done by contacting customer support.

Next, you'll need to purchase DLR.TO during trading hours. Note, as per TD direct investing pricing, there is a $9.99 flat rate commission per buying order. After making the purchase, you'll have to wait two business days to own the shares officially.

At this point, you can contact TD Direct Investing support to have the DLR.TO shares journaled over to DLR.U.TO. After selling the shares, you'll have to wait another two business days to access the USD. You will also have to pay a commission for selling. Overall, the process takes four to five business days.

RBC Direct Investing

RBC logo

Using RBC to complete Norbert's Gambit will also take about five business days. You'll also need separate USD and CAD accounts. Unlike Questrade, you don't have both versions by default.

If exchanging CAD for USD, you'll begin with making an order for DLR.TO. If you want to exchange USD for CAD, the first order will be for DLR.U.TO. Either trade will incur a $9.95 flat rate fee.

Next, you'll need to sell the opposing stock in the relevant currency account. For example, if you bought DLR.TO in your CAD account, you would need to place an order to sell DLR.U.TO in your USD account. This can be done by selecting Place an Order > Stocks and ETFs. You may get a warning about selling a security that you don't own. While you hold the security in the opposite account, settling takes time.

In the end, you can sell the stock in the currency account you want to receive.

BMO Investorline

BMO logo

Unlike RBC, you'll need to call support to journal your shares.

The process begins with buying DLR.TO with your Canadian-dollar account or DLR.U.TO with your US-dollar account. You can then check in Trade > Order Status to ensure all your shares have been filled.

Next, you'll have to call BMO InvestorLine support and have them journal your shares to your other currency account. If you want to exchange CAD for USD, you need to ask them to journal your DLR.TO shares to DLR.U.TO on your US-dollar account. Once the trade has settled, you can begin using your USD.

In the end, you can sell the stock in the currency account you want to receive.


Wealthsimple logo

Currently, Wealthsimple doesn't offer Norbert's Gambit because they don't support dual-listed stocks. This means you can't access DLR.U.TO using Wealthsimple.

However, there are some alternative solutions. The best way to save money on the exchange rate fee is through a TradePlus subscription. This is a $10 per month USD account. While you will still need to pay 1.5% when converting CAD into this account, the idea is to save money in the long term by only incurring the fee once. Without the account, you will have a 1.5% fee when buying U.S. stocks and another 1.5% when selling to convert back to CAD.

Additionally, you can't directly deposit USD to WealthSimple. This means there is no way to avoid the 1.5% conversion fee. The customer support team revealed that the team is looking into this feature but still needs a timeline. Once this feature is enacted, investors can use a digital wallet such as Wise to reduce exchange rate costs.

The Bottom Line

Overall, Norbert's Gambit is a simple and effective way to save money on currency conversion costs in the stock market. If you are comfortable with the risks involved and understand how this method works, it can be an excellent option for investors looking to reduce their exposure to exchange rate fees. However, it is essential to consider all your options and research before choosing a strategy for investing in multiple currencies.

Frequently Asked Questions

Norbert's Gambit usually takes four to five business days to complete. This is due to the time it takes for the stock purchase and sale to settle. It takes one to two days each for the purchase, journaling, and selling settlements to occur.

Norbert's Gambit is named after the person who invented it, Norbert Schlenker. He created the method while working at Libra Asset Management and designed it to save Canadian investors money when buying stocks on States exchanges.

Yes, Norbert's Gambit can be used in a TFSA account. However, it is essential to note that your TFSA brokerage must support USD and CAD balances. Without a USD account, your balance will convert to CAD when you sell DLR.U.TO.

For example, Wealthsimple only provides a USD account with a TradePlus subscription. Additionally, many other brokerages, such as TD and RBC direct investing, require you to open a dual-currency account.

Yes, you can use a third-party exchange service and directly deposit the other currency into your account. For example, you can use a digital wallet such as Wise that automatically converts currencies at the best available exchange rate.

Norbert's Gambit should generally be avoided if you're uncomfortable with the following reasons;

  1. Four to five-day settlement waiting period. You won't be able to access the money while the transaction is finalized.
  2. Exchange rate risk while the settlement concludes. This only applies when you are exchanging USD for CAD. This is because DLR.U.TO is fixed and doesn’t have wild swings. After buying DLR.TO, you already own USD. As a result, journaling from DLR.TO to DLR.U.TO will have no value swings. However, DLR.TO is constantly changing which means the value might change when journaling DLR.U.TO to it.

Yes, Norbert's Gambit is legal and compliant with all local and international laws. However, it is essential to note that there are some risks involved when using this method to save on currency conversion fees.

Yes, after completing Norbert’s Gambit, you can withdraw into a USD bank account. However, some platforms such as Questrade will charge fees if withdrawing into a United States-based bank account. You can open a USD account with a Canadian bank to avoid this. If pursuing this strategy with a registered account, make sure not to exceed your limit. For example, there is a contribution limit for TFSAs and RRSPs.

The calculators and content on this page are provided for general information purposes only. WOWA does not guarantee the accuracy of information shown and is not responsible for any consequences of the use of the calculator.