Norbert’s Gambit Using MD Direct or Qtrade

Norbert’s Gambit or Q-Bert’s Gambit?

Norbert's Gambit using Qtrade

Norbert’s gambit is a way to exchange Canadian and US dollars extremely cheaply using a discount brokerage. Whenever I hear about Norbert’s Gambit, it makes me think of Q-Bert.

Q-Bert was a computer game character from the 1980s. At the time, he represented cutting edge complexity because Q-Bert jumped up and down on blocks drawn in [dramatic pause].. 3D. Similarly, most people think Norbert’s Gambit is dauntingly complex. I found out that it is easier to do than a high-score on Q-Bert was for me.

Partly of why I think of Q-Bert, is the fact that I use MD Direct which is powered by Qtrade. Yeah, I know, kind of cheesy and silly. But, cheesy and silly is how I roll.

I could find nice videos about how to do Norbert’s Gambit for most discount brokers -except MD Direct or Qtrade. To quote Q-Bert: “@!#?@!” I further curse and swear like Q-Bert when I think of how we get gouged by currency exchange fees: @!#?@!rip-off@!#?@!criminals@!#?@!

What is Norbert’s Gambit?

Norbert’s gambit is a maneuver to exchange $CAD and $USD through a discount brokerage without getting fleeced by fees. This can be useful if you want to take advantage of investing in US-listed ETFs or if you like to spend $USD. Both apply to me.

The process may seem intimidating or a hassle. It did to me when first reading and hearing about it. However, it is surprisingly easy. I have broken it up into detailed steps in this post. The amount of detail could make it seem complicated, but really that is just because I walk through pretty much every click of the mouse. I know how those simply things can ironically be daunting.

Learning to do this can save you the usual 1.5-2.5% foreign currency exchange fees. That adds up very quickly.

A “gambit” is a calculated move.

Executing Norbert’s gambit isn’t something that can be done when you want the money today or tomorrow. Fortunately, successful investing is about the long-term (years) and a few days here or there does not matter in the grand scheme.

Even though it is done over a few days, it really only takes a few minutes per day. That said, the fact that it takes two or three sessions on a computer a few days apart is likely why people perceive it as a complex hassle. However, for comparison, using many foreign exchange services requires a phone call and printing/scanning/emailing of declaration forms which is equally cumbersome.

The other reason is human contact and jargon.

Fortunately, Qtrade allows you do to Norbert’s Gambit simply and fully online. No pesky human contact.

I am not a “phone person”. My dislike and discomfort for phoning people skyrockets further if I have to call a stranger and ask for some type of service. That is magnified, if it is on the edge of my knowledge comfort zone and I am basically doing something to bypass a process their company makes money from (currency exchange fleecing). “Hi, I am calling to make more work for you so that I can circumvent how your company makes money.” Awkward.

So, one of the rate-limiting steps of using Norbert’s gambit for me was that you are supposed to call your trade center and ask them to “book-over” your CAD-denominated holding into a USD-denominated holding. All with a confident Jedi-mind-trick-voice.

Norbert's Gambit

Norbert’s Gambit Using Qtrade: Step by step with screenshots

Disclosure (and to cover my butt): I have my accounts at MD Direct. However, I have no other financial relationship with them and anything that I write is not affiliated with MD Direct or Qtrade in any way. Further, I am not a financial professional. The products I am using are for illustrative purposes. They work for me. As a DIY investor, you must manage your own affairs or seek help as needed (beyond some looney doctor on the internet).

Step 1: You have cash in your CAD Account.

I will use my CAD RRSP to demonstrate since the benefits of US-listed ETFs are greatest in an RRSP. You will note that I have nick-named my RRSP to make it easier to identify instead of the alphanumeric code that Qtrade assigns. You can do that too in the “account preferences” section of the Qtrade service center. I will simulate exchanging $10K CAD for mathematical ease.

Step 2: Buy DLR on the Toronto Stock Exchange.

DLR is the Horizons $USD tracking ETF that is listed on the Canadian exchange. I am using DLR since it is directly linked to what I am doing (currency exchange) and not fluctuations of a specific company or market.

Navigate to the trade equities tab.

That will get you to the trading screen. It should be on the Canadian market by default. Toggle the action tab to “buy” and the order type tab to “limit order”. Enter in DLR as the symbol for the Canadian-listed ETF that holds US dollars.

Next, enter the limit price (the most you are willing to pay). I generally make that the same as the asking price because I hate partially filled orders and spending the time and commission twice. In this case, I would enter $13.50.

For the quantity to buy, I divided my money ($10K) by the limit price and round down. For this example, $10000/$13.50=741. So, I would use 740. That would also leave $10 – enough to cover the $8.45 commission.

USD exchange Qtrade

Then, click review order, double check that it all adds up, and click submit order. It should fill pretty quickly. However, you now need to wait at least three days for the trade to officially “settle”. That is the date of the trade plus two business days. Perhaps you could push before then, but I have not tried that.

Step 3: Wait three days for trade to settle.

Norberts gambit

Confirm in your account and account history that the trade settled. [Update: I have since done it several times where I do step 4 shortly after buying the DLR (same day). It then automatically transfers when the trade settles. That is usually at the end of the day two days later.]

Step 4: Transfer The DLR to your USD account.

Go to the Transfer funds menu item.

Select “Move Securities” which allows you to transfer between your USD and CAD account of the same type (in this case RRSP).

Select your stuff to transfer from the drop-down menus.

exchange US dollars

Step 5: Wait for it to transfer. May take a day.

This could take a day. My account showed it transferred the same day when I did it, but I actually just left it and came back the next day. I had to mow my stupidly huge lawn. [Update: I have since done it several times where I do step 4 shortly after buying the DLR (same day). It then automatically transfers when the trade settles. That is usually at the end of the day two days later.]

Step 6: Find it in your USD Account & Sell it for US Dollars

This is where there can be confusion. The USD version of DLR is DLR.U. However, it will still show up in your USD account as DLR (not DLR.U) with the correct number of units you bought and the value displayed in USD. Don’t worry, all is ok despite this weird display. You can hit the “sell” tab to go to the trade equities screen below. I needed to then manually change the DLR to DLR.U to make sure it sold to $USD.

norbert's gambit Qtrade

After that, the cash shows up as $USD in the USD RRSP.

How long does Norbert’s Gambit take and how much does it save?

Well, it was simple enough that I needed to put some padding at the beginning of this article to hit 1000 words and rank better in search engines. While the dates in my recreated screenshots are from today, I actually did this last month. I wanted to see that everything cleared and I didn’t get any awkward phone calls. In all, it took me three 5-minute computer sessions.

How much money did I save for 15 minutes of my time?

The financial cost was ~$17. For the $10K exchanged, that is 0.17%. For comparison, the exchange fee for $10K at Qtrade is 1.75% or $175. So, I saved ~$150 for about 15 minutes of work. Since the fees are fixed at $17, it becomes more efficient as the amount transferred increases.

In addition to the fixed transaction cost, there is also some loss to the bid-ask spread. That is the difference between the buy and ask price for a security that the market makers skim some profit from. It is usually <0.1% on each end of the maneuver for a total <0.2%. So, even when that is considered, it is still usually much less than the going exchange rate through a financial institution.

On the other end of the scale, $1K would break even. Under $1K would cost more in the trading fees than the usual percentage fee.

What if the DLR drops over those three days?

This seems to come up in discussions. However, I think it is irrelevant. Unless you can predict currency changes (which you wouldn’t be reading this blog if you could), then these fluctuations are random. You may lose 0.5% this time or gain it another time. It should average out over time with multiple transactions. In contrast, fees are not random – and you can control them through Norbert’s Gambit.


  1. Nice article! Glad to see one brokerage has rolled out an online solution to replace the annoying phone call.

    With regard to the risk of DLR falling it’s not a significant risk for the following reasons. DLR mainly holds US Treasury Bills which are very stable financial instruments. US T-Bills are denominated in USD but when you look up the ticker price on the TSX DLR is priced in CAD which of course fluctuates with the exchange rate. What this means is that if you follow the price of DLR it goes up and down in CAD but if you look at DLR.U its price in USD is very stable.

    In other words, once you buy, say, 500 units of DLR, it doesn’t matter after that point what the CAD:USD exchange rate does. CAD could go to zero in the intervening 3 days but you’ll still have the same 500 units of DLR which you can sell as DLR.U and get the USD. A good analogy is to think of one unit of DLR as a $10 bill in USD – once you’ve bought the $10 bill, its intrinisic value in USD does not change even if its CAD value does. Buying DLR “locks in” the CAD:USD exchange rate at the time you buy it. (Note that doing the reverse Norbert Transaction, buying DLR.U in USD and selling DLR to get CAD, does not protect you from currency exchange fluctuations).

    1. Thanks Dr. H! That is a great way to frame it. I agree that it is really a non-issue, but I kept seeing it mentioned in articles/comments as I was researching. It would be more of a potential issue if using stocks with a Can/US version. DLR does really seem the ideal method to me.

  2. i use transferwise for several years
    it is best solution for currency exchange and travel money

    first transaction is freewith this link

    not spam but personal experience
    it is like p2p transactions with forex rate

    1. Thanks Ivan. Can’t say that I have used it. The fee for $10K using that site is ~0.7%. Much better than the banks, but still higher than Norbert’s Gambit. I have used similar services, like Knightsbridge. The time spent arranging the accounts and transfers etc. was about 10 minutes (longer the first time for set up) and I had to talk to a human. Still, was overall pretty convenient.

      The best exchange method that I have used is actually Interactive Brokers where you can exchange the currency directly. I recently did $100K CAD to USD for $2.99 Canadian. That is 0.003% and it took 2 minutes, but the interface was a bit more intimidating than what the average retail investor is probably used to. Also useful for EUROs if that is a need.

      1. This post comes at a good time for me. I’m fairly new to Canada and have some ongoing financial obligations back in the states. I’ll be needing to exchange and transfer about 30k CAD per year to my US bank account. Transferwise is definitely better than my banks, but still a few hundred bucks per year.

        Based on these comments, I’ve looked into Interactive Brokers. It looks like they have some account fees and minimum balances and the interface looks confusing to me.

        It also looks like Q-trade charges $25 CAD per quarter for balances less than 25k CAD (I’ll be setting up an RRSP at some point next year, so maybe this will serve that purpose).

        Does anyone know how Questrade works for Norbert’s gambit? Any advise is much appreciated.

        Thanks a lot!

        1. Hey Sean. There is a video for Norbit’s Gambit for Questrade

          The other issue with using Interactive Brokers is that is you want to get cash out, then there is a delay. If you put money into IB from one bank account (in CAD) then buy USD and try to send out to your USD bank account they have 45 day wait period. The reason is linked to sending money out to a different bank account from which it was brought in.

          Good luck and thanks for reading!

  3. Thank you again Loonie Doc for another great post. I must confess I have not used Norberts gambit (love the name though!).
    I have transferred my investing/trading accounts to Interactive Brokers which has a ridiculously low forex fee, as you suggested. Further their trade fees are insanely low as well, often $1 per lot. This was worth the small effort for a lifetime of trading fees and forex fees when buying USD listed ETFs. As the numbers get large over decades, these fees turn into large sums of money to be saved. The banks make a handsome profit with hidden forex fees. Just FYI Interactive brokers doesnt allow for RESPs and LIRA accounts.

  4. I, too, was awed by the 3D advances that Q-bert brought to the world of 1980s video games, and I’m touched to see I’m not alone.

    It was like playing with an interactive M.C. Escher painting, and no amount of recreating an actual disembowelment on a modern shootemup game will touch that excitement I felt.

    Passing this article onto my Canadian family members!



  5. Hi there,
    Thank you very much for posting this. I have a Qtrade LIRA/LRSP account (which is a locked in Retirement account). In case folks aren’t clear I had a previous DCPP whic is a Defined Contribution Pension Plan from a former employer, that once I left that company, I requested and transfered the funds to a LIRA at Qtrade.
    My issue is I would like to do the same Norbert’s Gambit on this account. However Qtrade does not offer a US Currency LIRA account. Can I do it within the CAN LIRA Account or that doesn’t work?
    I.e.- buy DLR, then call in and request they book it to DLR.U, wait the requisite timeframes then sell and buy my US ETF in US Funds? Or when they book to DLR.U they will “exchange” it and charge me the exchange fee?
    Any insights would be greatly appreciated.

    1. Hi Flema. First off, smart move with the LIRA. We have the same issue with our spousal RRSP at Qtrade – no USD version. I haven’t found a way around that because everything is converted back to CAD. Which USD ETFs or areas are you looking at investing in?

      1. Hi there,
        Thank you very much for the reply. I’m a big fan of JLCollins: A Simple Guide to Wealth.
        So am concentrating on Vanguard VTI ETF. If I have this correct, a US currency ETF in a US currency registered account (RRSP/LIRA) is not subjected to the 15% withholding tax. A CAN exchange ETF with US holdings in it, is….boo!
        We are not millionaires, so realistically this is approx 15% of 1.81% (Dividend payment) of $200k going into a LIRA. That works out to $543 in CAN? But in 15 years assuming 9% average return, now its approx $2k a year lost in withholding.
        Additionally- the MERs are higher for CAN ETFs.

        But I may be stuck and will have to settle for a CAN exchange US ETF (i.e. VUN.TO)- or I go searching for another discount brokerage that has US currency LIRA accounts. Seems the banks do, but it was a MAJOR hassle getting the DCPP administrator to release the funds- I’m talking 4 phone calls, multiple forms, follow up, follow up… wow. To go through that again to move it out of Qtrade to another broker may not be worth it. Any insights would be appreciated

        1. Hi Flema,

          Yeah, that does suck. XUU has the lowest MER for a Canadian ETF covering the US (still the FWT issue in an RRSP, but MER lower than VUN). XEF holds non-NA developed market stocks directly (so no FWT issue). IF you find a discount brokerage or way to have a USD LIRA or spousal RRSP, please update with a reply. That would be valuable information!

  6. why does one need to wait 3 days to settle? why can you not just move the DLR to USD account once the trade has gone- not sure I understand what has settled? Has anyone tried this since you wrote the post or discussed the cons of moving the money same day as the buy?

    1. Hi Gael. I have done it a bunch of times now. You can submit actually the request to move it once it shows up listed in your account. That usually happens same day. However, it won’t actually move to the other account until it has settled. I have started doing it that way (basically so I don’t forget).

  7. Hello! I’m a Canadian living in the US and am looking to transfer/exchange a 6 digit CAD figure to my brokerage account in the US.

    I’ve seen many discussions about using Norbert’s Gambit through a Canadian discount brokerage account, something I don’t have and that seems impossible for a non-resident to open, based on these brokerages’ online application wizards.

    I’ve also talked to Interactive Broker’s customer service and have gathered my application will likely be denied on account of a lack of trading experience.

    My questions are:
    1. Is it possible to pull off Norbert’s Gambit using an American brokerage account, practically speaking? (to put it bluntly, is this even worth pursuing as I haven’t found anybody discussing this)
    2. The only trading platform I’ve seen mentioned with respect to the “direct trade” possibility is Interactive Brokers. Is there a reason others aren’t mentioned? (e.g. my limited foray into this possibility hinted why – a TD Ameritrade rep told me incoming international wires are exchanged to USD automatically; TD Ameritrade’s forex platform, thinkorswim, seems to have a relaxed entry barrier compared to IB, so would’ve been ideal).

    Lacking NG or IB/similar, I’m otherwise stuck with Transferwise, or KnightsbridgeFx, or similar (or big banks), so would appreciate any info to rule out the above nicer options.

    Thank you.

    1. Hi Gary. It is a great question. I have not used a US brokerage. I guess the key part would be for the US brokerage to offer CAD trading accounts (along with the USD one). I am not sure if any do. The only platform that allows direct FX trades is IB.

      1. Thanks for answering. “US brokerage to offer CAD trading accounts” – that’d be key.

        “The only platform that allows direct FX trades is IB.” I don’t understand enough about Forex trading to interpret this, but it seems to line up with what an Ameritrade Forex support person told me today. Their accounts are funded and drawn from in USD only, and Forex trading happens on “contracts”, not currency directly (hoping I’m communicating this correctly). So that somewhat confirmed (to me) that IB is different.

        I’m just about settled on biting the bullet and going with a foreign exchange service.

  8. Great information. Thanks so much for the step by step instructions.

    I have a RIF and would like to purchase some US listed ETFs. I would prefer not to open a US RIF at $15US/quarter fee at Qtrade. Is is possible to just purchase the DLR on the TSX within your Canadian RIF and then get Qtrade to journal it over to DLR.U (like I have heard you can do with Questrade) in order to sell it and get the US$ within your CDN RIF then purchase the US listed ETFs?

  9. Thanks for putting together such clear instructions!

    I’m going to be moving funds in the other direction USD to CAD. I assume I just reverse the steps and start with DLR.U in my USD account and then transfer to my CAD account. I wanted to check if there are any extra steps or problems going from USD->CAD.

    Also, would you recommend breaking up a larger amount into multiple transactions? What would your max be?


  10. Very helpful post, especially the part dealing with how DLR.U shows up as DLR after moving the securities. Thank you!

    1. Thanks. I have done the maneuver regularly at this point. It is even easier than when I wrote the post. I now buy the DLR and then it shows up in my portfolio view almost instantly even though it hasn’t settled yet. I them request the transfer and it automatically goes when it settles without my having to remember and come back. I just check my USD account a couple of days later and it is ready to sell.

  11. I’m interested in trying the gambit for the first time in my Qtrade accounts. Can you comment on whether the gambit would work with any of the following ETFs: FAO, HXS and HXT. Those ETFs are commission-free and are available in both CAD and USD currencies. Thanks!

    1. Since they are both in USD and CAD versions, it should work. Of course, there is also going change in the value due to the market changes over the days since they track equity or fixed income rather than the US dollar like DLR does.

  12. This must work the exact same the opposite way?

    Also, These are both listed on the TSX though so I’m not sure how you are avoiding the unfavorable exchange. If you buy DLR.U in your US account, it will be converted (with the 1-1.75% fee) into USD? What am I missing?

    1. Hi Taylor. You need both a USD account and a CAD account. If you buy DLR in the Canadian account and transfer the DLR to the USD account and then sell it as DLR.U in the USD account it pays USD into the USD account there is no exchange fee. Or viceversa.

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