A technical guide on bypassing traditional bank spreads using inter-listed securities on the Toronto Stock Exchange.
Absolutely. It is a standard journaling process used by investors to move assets between currency-denominated accounts. Banks don't advertise it because it eliminates their 2-3% conversion fee, but as long as you have a brokerage account that supports both CAD and USD, you are fully within your rights to use it.
In most Canadian brokerages, the settlement period follows the T+2 rule. However, the journaling process itself—moving the shares from the CAD side to the USD side—can take anywhere from 2 to 4 business days depending on whether you call a representative or use an automated online tool.
The Horizons 0-3 Month T-Bill ETF is the industry standard. Specifically, look for DLR.TO for the Canadian side and DLR.U.TO for the US side. These are designed to track the US dollar and have high liquidity, which minimizes the risk of price fluctuations during the journaling period.
I remember sitting in a small office in Montreal back in 2015. The Canadian dollar was taking a beating due to the oil price crash, and I needed to move a significant sum into USD to cover some tech stocks I’d been eyeing. I called my bank, and the teller nonchalantly quoted me a rate that was nearly 3.5% off the spot price.
«— You’re telling me I’m losing four thousand dollars just for the privilege of clicking a button?» I asked. The silence on the other end was my answer. That was the day I stopped using bank "conversions" and started using the Gambit. It felt like discovering a secret backdoor in a rigged game.
Since then, I’ve taught dozens of investors how to do this. It’s not about "beating the market"; it’s about simple engineering. You buy something in one currency, you move it to another shelf, and you sell it. No magic, just mechanics.
Compare Bank Rates
Log into your Canadian brokerage account. Buy the desired amount of DLR.TO (Horizons US Dollar Currency ETF) using your CAD balance. Ensure you use a Limit Order to avoid overpaying during a sudden spike.
This is the critical step. You must contact your broker (or use their online chat) and ask them to "journal" your DLR.TO shares to the USD side of your account, where they will appear as DLR.U.TO.
The shares need to settle. This usually takes 2 business days. During this time, the value of your position is pegged to the USD, so you are protected from CAD fluctuations.
Once the shares appear in your USD account, sell them. You will receive US dollars directly into your USD cash balance. Your only cost here is the two trade commissions.
«— I’ve found that Questrade and TD Direct Investing are the most straightforward for this. Questrade allows you to request the journal via a simple chat bot, saving you thirty minutes on hold.»
When you exchange $10,000 CAD at a bank, you might lose $250. With the Norbert Gambit, your costs are fixed regardless of the amount.
Remember that for the CRA, this counts as a disposition of property. If the value of DLR changes significantly during the settlement period, you may have a small capital gain or loss to report.
Read Tax Guide →For amounts over $100k, some prefer specialized brokers. However, for the average investor holding assets in an RRSP, the Gambit remains the most efficient path.
View IBKR Guide →Stop donating your hard-earned capital to bank spreads. Start managing your currency like a professional investor.
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