# Nortbert Gambit in TD Waterhouse RRSP



## Kaitlyn (May 13, 2011)

I have a TD Waterhouse RRSP and have been trying to read up on doing a gambit and even after reading many it is rather confusing. It seems some are outdated and there have been some evolutions somewhat recently.

So can anyone confirm the latest and greatest way to do the currency exchange? Is there an "instant" way without needing to call in to TD?


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## Spudd (Oct 11, 2011)

Inside the RRSP it is easy and instant. I was confused about this when I tried to do it a few months ago. But actually, very easy. 

First you do have to make sure your auto-wash is turned on. For this you have to call TD. 

Once that's done, you buy a Canadian stock that's interlisted. For example, buy TD on the TSX. Then sell TD on NYSE. You will now have USD.


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## Kaitlyn (May 13, 2011)

Spudd said:


> Inside the RRSP it is easy and instant. I was confused about this when I tried to do it a few months ago. But actually, very easy.
> 
> First you do have to make sure your auto-wash is turned on. For this you have to call TD.
> 
> Once that's done, you buy a Canadian stock that's interlisted. For example, buy TD on the TSX. Then sell TD on NYSE. You will now have USD.


Is this the same as DLR and DLR.U as I hear the most? They are both TSX but one is USD...

I think even something I was reading from February said you needed to call in and ask them to journal it over to the other symbol.. ugh!


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## avrex (Nov 14, 2010)

I respectively submit that the process used in the posts below are not outdated. They do work.

Your choices.
*1. Accept the forex charge*
Accept the 1.5% forex charge most Canadian banks charge
*2. Gambit*
You're only other alternative is to perform 'the gambit'.

You mentioned that this is a TDW RRSP. 
Therefore, please refer to the section *2. TDW RRSP account* links below.
Note, that in this TDW RRSP example, the DLR and DLR.U pair is not used. (perhaps this is where your confusion lies)



Kaitlyn said:


> So can anyone confirm the latest and greatest way to do the currency exchange? Is there an "instant" way without needing to call in to TD?


Once you have the automatic wash set up, there is never a need to 'call in' for this type of gambit.

Please have a read through again.

I hope this helps alleviate the confusion.



**************************************************


*USD/CAD dollar conversion, DLR/DLR.U and Gambit sticky notes.*


*TDW - TD Waterhouse notes*

*1. TDW non-registered account*
a) CC has updated this information (July 27,2011)
Instant Norbert Gambit for All TD Waterhouse Investment Accounts
TD Waterhouse representatives say they are ready now to execute the sell sides of instant stock gambitting pairs for all clients with every size of non-registered account (thanks CC)
b) CC's previous post on the use of the "DLR and DLR.U" gambit (May 25, 2011)
Note. There will be no individual security risk over the time (ie. 3 days that) it takes to journal the shares over because you will use DLR/DLR.U instead.
A Foolproof Method to Convert Canadian Dollars into US Dollars



*2. TDW RRSP account*
I would use the standard gambit involving an individual security (ie. buy RIM-T, sell RIMM-Q).
The TDW system for RRSP accounts allows this to happen immediately (so there is little individual stock risk)
Two examples:
Easy Norbert Gambit in TD Waterhouse RRSP Accounts
TDW RRSP - Currency conversion vs. "the Gambit" 


*TDW RRSP Automatically washes rates*
The above posts may refer to phoning in to wash the rates. However, just recently, TDW now automatically washes the rates, within your RRSP, when dealing with currency conversion. You just need to enrol. See these posts:
Automatic Wash Trading at TD Waterhouse
Toronto Dominion Waterhouse (TDW) RRSP - You can now automatically 'wash the rates'


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## GoldStone (Mar 6, 2011)

Kaitlyn said:


> I think even something I was reading from February said you needed to call in and ask them to journal it over to the other symbol.. ugh!


TD unregistered investment accounts have two sub-accounts: one for CAD, one for USD. The two sub-accounts have the same number but two different letter suffixes. If you want to buy a security in one sub-account and then sell it in another, you have to call and ask for a journal.

That does *not* apply to TD RRSPs, because they don't have two sub-accounts. You can simply buy an interlisted stock on Canadian exchange and then instantly sell it on American one. 

I would not use DLR/DLR.U pair in TD RRSP because of their low trading volume. I would use a regular interlisted stock.


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## Kaitlyn (May 13, 2011)

GoldStone said:


> TD unregistered investment accounts have two sub-accounts: one for CAD, one for USD. The two sub-accounts have the same number but two different letter suffixes. If you want to buy a security in one sub-account and then sell it in another, you have to call and ask for a journal.
> 
> That does *not* apply to TD RRSPs, because they don't have two sub-accounts. You can simply buy an interlisted stock on Canadian exchange and then instantly sell it on American one.
> 
> I would not use DLR/DLR.U pair in TD RRSP because of their low trading volume. I would use a regular interlisted stock.


Thanks for the clarification. I've never even tried to sell a "different" stock - so I should have no issue buying RIM and selling RIMM? Even though they are different symbols - the system will know they are the exact same?

On the sell screen is a field for symbol and select for exchange. I suppose I select "RIMM" - "US" despite holding "RIM" - "CDN" ?


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## avrex (Nov 14, 2010)

You've got it, Kaitlyn :smile:

Even though you own RIM - CDN, you can put a sell order in for RIMM - US.
TDW will allow the transaction and work it out.


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## Kaitlyn (May 13, 2011)

avrex said:


> You've got it, Kaitlyn :smile:
> 
> Even though you own RIM - CDN, you can put a sell order in for RIMM - US.
> TDW will allow the transaction and work it out.


Thanks again! Here's hoping I don't screw EVERYTHING up tomorrow!


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## avrex (Nov 14, 2010)

One more thing Kaitlyn. As Spudd mentioned above, if you haven't done so already, 
you should call TD Waterhouse Discount Brokerage (1-800-465-5463) tonight, to enroll your TDW account in the 'automatic wash' program.


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## GoldStone (Mar 6, 2011)

Kaitlyn said:


> On the sell screen is a field for symbol and select for exchange. I suppose I select "RIMM" - "US" despite holding "RIM" - "CDN" ?


I never gambitted RIM. I always used stocks that have the same symbol on both exchanges, such as POT or SU. So I would buy POT-CA and then sell POT-US.

But RIM should work too. I know other people used it. You only have two possible combinations: sell RIM-US or sell RIMM-US. If WebBroker doesn't like the first combination, it will give you an instant warning. You can hit back and select the other one.


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## Kaitlyn (May 13, 2011)

avrex said:


> One more thing Kaitlyn. As Spudd mentioned above, if you haven't done so already,
> you should call TD Waterhouse Discount Brokerage (1-800-465-5463) tonight, to enroll your TDW account in the 'automatic wash' program.


Thanks for the reminder - I actually did that last week. called tonight to confirm it's enabled


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## mart (Apr 2, 2012)

For 50k, should it be done differently? I'm thinking of doing it with POT but looking at the quote there aren't many bid / ask lots.. so this has me concerned for such a large transaction. Should I simply split it in 2-3 transactions of 15 - 20k each?


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## GoldStone (Mar 6, 2011)

mart said:


> For 50k, should it be done differently?


No.



mart said:


> I'm thinking of doing it with POT but looking at the quote there aren't many bid / ask lots.


At $44/share, you need to trade about 1100 shares. 452K shares traded so far today. Good enough volume to trade 1100 shares in one shot. Use limit order.

SU is another good candidate. 2x volume compared to POT.


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## mart (Apr 2, 2012)

Thanks a lot Goldstone.

It turns out that TDW hadn't linked my account sicne I asked only 4 times. Now, I've called and they'll fix that so I have to wait tomorrow. It sure took a while to transfer all my accounts to TDW.. it was a circus.


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## gibor365 (Apr 1, 2011)

I was wondering which interlisted stocks you're using for "gambit"?
I used last time TD.... next week also wanted to use TD (as I want to live some TD-T in the account and rest convert into US MM). As per closing prices i checked what amount in US (minus fees) I'll get if I buy 10K TD-T and sell TD-N.... it will be $10,085US and this is ...the lowest amount comparing to "gambiting" with other stocks... for example if I "gambit" BNS, I'll get $10099 and with SU $10097... why I get this difference?


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## GoldStone (Mar 6, 2011)

You get the difference because stock prices fluctuate. Repeat this exercise several times during the day. Chances are you will get different results. The stock that gives you the worst exchange rate in the morning might give you the best rate in the afternoon.

When interlisted stocks deviate too far from the spot exchange rate, institutional arbitrageurs take advantage of the opportunity. In your example, they can do the following:

1. Buy TD-N for $10,085
2. Sell TD-T
3. Buy BNS-T
4. Sell BNS-N for $10,099 to pocket $14

Except they would move much larger sums and it's all automated.

Note that steps #1 and #3 bid up TD-N and BNS-T. Steps #2 and #4 bid down TD-T and BNS-N. As a result, both pairs of interlisted stocks move closer to the spot exchange rate. The anomaly disappears. It's a self-correcting mechanism relying on market forces.


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## gibor365 (Apr 1, 2011)

GoldStone, thanks, that what I thought.... the question is TD-N volume (avg. 360K) is enough for smooth 10K gambit?


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## mrPPincer (Nov 21, 2011)

gibor said:


> is TD-N volume (avg. 360K) is enough for smooth 10K gambit?


I used TD-T/TD-N for a 40K gambit in my TDW RRSP four months ago and it went very smooth.
TD bank was a stock I wouldn't have been too uncomfortable holding a little longer if I hadn't got my price immediately.

I used limit orders and waited for my prices on both the buy and sell, which didn't take more than several minutes on that day; and after calculating the US dollar value using the day's exchange rate, sold for an extra $20 over what I paid to cover my trading fees, effectively converting my $CDN to $US for free, no ptoblem.


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## humble_pie (Jun 7, 2009)

td is a perfect carrier stock for gambitting imho, save & except for situations where gambitter doesn't want to use currency amounts that result from round lots of $80 stock, ie roughly 8,000k, 16,000k etc.

odd lots should be avoided in gambits since they could slow down execution. 

most gambitters will likely be placing market orders. I use limit orders strictly; but well-chosen limit orders work well in gambits & don't hinder the speed. One should not add an all-or-none restriction as it will keep pushing an order to the end of the queue.

m pincer you must have chosen a short-term rising wave, ie buying td in tto, then selling in ny as stk rose. Félicitations, yours was the olympic gold of gambitting.


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## GoldStone (Mar 6, 2011)

TD should work just fine. That said, I prefer to gambit stocks with 1M+ average daily volume on both exchanges. Lots of candidates pass the threshold: ABX, ECA, TLM, POT, SU, CNQ, MFC, RIM.


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## kcowan (Jul 1, 2010)

Just try to do it on a positive uptrend day.


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## humble_pie (Jun 7, 2009)

GoldStone said:


> ... ABX, ECA, TLM, POT, SU, CNQ, MFC, RIM.


stocks in this list are more volatile. This makes them more difficult to gambit.

best gambit candidate is a tranquil, sleepy dodo with no looming news, earnings or dividends.

stocks like rim & cnq are gambit no-nos.




kcowan said:


> ... do it on a positive uptrend day



a whole day ? don't forget the buy-side price will be moving up, too. Gambitter needs instead to spot a 3-4 minute downdrift (buy!) where he can foresee a positive uptrending 120 seconds to follow (sell!) ... difficult to pull off w volatile stock ... much easier to choose a groggy dodo stock that's dozing off :biggrin: ...


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## mart (Apr 2, 2012)

Just to confirm, to buy VTI / VXUS after a gambit: 
- sell usd money market (TDB166) for what you need + a bit more
- buy stock (how long do you have to wait?)
- whatever extra TDB166 you sold will then be returned to TDB166 automatically


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## GoldStone (Mar 6, 2011)

mart, no!

- call customer service to enable automatic wash trades
- buy stock

Back office will sell the right amount of TDB166 to settle the trade. TDB166 sell order will show up in WebBroker on T+2 after hours, or T+3 in the morning... don't remember when exactly.


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## mart (Apr 2, 2012)

GoldStone said:


> mart, no!
> 
> - call customer service to enable automatic wash trades
> - buy stock
> ...


Ah! Thanks. I have the auto wash trade enabled (bought quite a bit of USD ~2 wks ago but it took a while to appear in TDB166). I thought that I had to do a sell before I could buy a stock. Nice to see that it's done automatically, it would be better if it appeared right away in webbroker, I'm not sure why that thing is so slow to update!


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## gibor365 (Apr 1, 2011)

Yesterday did another gambit....
I had money in TD inv saving account.
So i bought TD-T and sold TD-N after about 15 min (as my working laptop crashed and should've restart ... luckily price didn't change at all), and right away bought MCD.... everything was pretty smooth....just a note, if you're doing such trades the same day and potential leftover in US$ is less than $100, those leftover will stay in the account as canadian cash


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## GoldStone (Mar 6, 2011)

mart said:


> Nice to see that it's done automatically, it would be better if it appeared right away in webbroker, I'm not sure why that thing is so slow to update!


As we discussed upthread, it's NOT done automatically. Back office reps manually enter money market orders to wash the trades. They do it on T+2 I think (not sure though). That's why there is a delay.


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## Chigu (Aug 6, 2009)

Spudd said:


> Inside the RRSP it is easy and instant. I was confused about this when I tried to do it a few months ago. But actually, very easy.
> 
> First you do have to make sure your auto-wash is turned on. For this you have to call TD.
> 
> Once that's done, you buy a Canadian stock that's interlisted. For example, buy TD on the TSX. Then sell TD on NYSE. You will now have USD.



But won't you lose out on the bid/ask spread? Wouldn't it just be cheaper and less risky to just convert cdn to usd the normal way?


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## Kaitlyn (May 13, 2011)

Chigu said:


> But won't you lose out on the bid/ask spread? Wouldn't it just be cheaper and less risky to just convert cdn to usd the normal way?


The idea is you lose the commission + bid/ask spread, which is less than what anyone will charge you to actually convert


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## mart (Apr 2, 2012)

GoldStone said:


> As we discussed upthread, it's NOT done automatically. Back office reps manually enter money market orders to wash the trades. They do it on T+2 I think (not sure though). That's why there is a delay.


In this case, does it mean that you either need a margin account or have enough CDN cash sitting in there to cover the trade since the money market trade will be done after hours?


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## humble_pie (Jun 7, 2009)

mart said:


> In this case, does it mean that you either need a margin account or have enough CDN cash sitting in there to cover the trade since the money market trade will be done after hours?


not quite following you ... would you have an example ... why would account need CAD cash other than to buy the carrier stock if the gambit is buy canadian on toronto plus sell on new york ...


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## mart (Apr 2, 2012)

humble_pie said:


> not quite following you ... would you have an example ... why would account need CAD cash other than to buy the carrier stock if the gambit is buy canadian on toronto plus sell on new york ...


Woops. sorry, this was meant as a follow up to my questions a few posts above. Once you have money in the USD Money market fund and want to buy a US stock / ETF, let's say VXUS. I thought that you had to sell some of the money market fund to cover the trade and then buy VXUS but goldstone said it wasn't needed, you could simply buy VXUS. Then, a few post later he said that the "washing" was done by hand at TD which is why it takes a few days for the $$$ to show in the US money market funds. My questions was then what I posted: if the washing is done by hand, how can you purchase a US stock from a USD money market fund if you don't have enough CDN cash sitting to cover the trade or a margin?


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## gibor365 (Apr 1, 2011)

mart, TDW platform realizes that you have US MM, it will sell amount of US MM just enough to cover you US stock purchase. Note that MM funds settle T+1 and stocks T+3 , so it's enough time to cover.


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## humble_pie (Jun 7, 2009)

gibor is right, except that "the platform" does not sell the USD mmf, the tdw laundry team does this by hand during the settlement period.

you can carry out your hypothetical US buy exactly the same way that you could buy a canadian stock while owning sufficient canadian MMF but not having the $$ in the account as cash.

the trading platform can recognize the presence of mmf in either currency & it can also detect the amount. 

for example, if your hypothetical order to buy VXUS were for an amount that would exceed the amount in US mmf - a registered account should not go into debit mode - then such an order to buy VXUS would generate a prompt telling you that you have "insufficient funds in mmf" for the order to go through. In such a case, investor can easily modify his order.

moving on with the hypothetical VXUS purchase, the tdw wash team will sell the exact amount of US mmf required to pay for VXUS. Investor does not need to calculate or do this.

the laundry operation itself is fairly complicated, but it's all done under the hood. Investor does not really *need* to see what is going on. I for one find that the laundry team does an excellent job.

what is important to know, i think, is that the visible reportage the client will see online in his registered account will nearly all be in canadian dollars. This is why investor should scribble a little handwritten note to himself with the US details of his VXUS order as he places it. How many units, plus price, commission & total cost in USD.

eventually, a few days later, after all the clean laundry gets ironed & delivered, investor will see that lo ! the correct number of VXUS units are in his account. He will see that his USD mmf holding has been reduced by the correct number of US dollars.


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## gibor365 (Apr 1, 2011)

HP, what I mean is exactly "the trading platform can recognize the presence of mmf in either currency & it can also detect the amount. "  
This is big advantage of TDW over CM where you have first place order to sell MM (doesn't matter US on CAN) and than place equity buy order. And if you desired limit is not reached, you have to CALL! CM (until 3.45 pm) and cancel MM sell order! (on order habd advantages of CM are lower fees and multiple orders the same day with 1 fee).
When I did TD gambit for the 1st time, I wrote down all exact amounts on all transaction and was waiting until it settles to make sure everything is correct. As a result everything was correct, but I missed huge opprtunity to buy very cheap PM on big pullback  (than Baron's wrote negative article about PM)
However, sometimes registered account can go in very small debit mode because of the rate fluctuation between placing trade and executing (I had 1 time something like -$1). 
2nd time I didn't hesitate and performed all 3 transactions in 15 minutes


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## humble_pie (Jun 7, 2009)

gibor said:


> When I did TD gambit for the 1st time, I wrote down all exact amounts on all transaction


yes ... you might recall that i coached you at that time, here in cmf forum. You were excited then & it appears you're still excited.

it's true the td platform will forgive tiny debit amounts in registered accounts. However how much it will forgive & for how long a period of time it thinks it's going to go on forgiving is known only to the lares & penates. Not a good idea to test this out.


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## GoldStone (Mar 6, 2011)

humble_pie said:


> I for one find that the laundry team does an excellent job.


While I agree in general, they are only human. This manual washing process leaves some room for human error. I once caught them making a mistake (MMF order wasn't the right amount). A quick call to customer service fixed it.

Whenever you expect a wash trade, verify MMF order on the settlement day (T+3). Make sure it matches your expectations.


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## Kaitlyn (May 13, 2011)

I'm still going to wait for everything to FINALIZE, but it looks like my first gambit worked well! 

I "converted" $15,000 CDN to $15,131 USD - sure beats ~$14,800!


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## humble_pie (Jun 7, 2009)

GoldStone said:


> This manual washing process leaves some room for human error ... Whenever you expect a wash trade, verify MMF order on the settlement day (T+3). Make sure it matches your expectations.


very good point. This is why investor wants to keep his hand-scribbled note until all the laundry is done & delivered.

it's only during the actual trade - the order & its fill prompts - that investor will be able to see all the USD figures for price, commission, total cost. After that opportunity alas the tdw software will begin showing most figures in CAD.


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## gibor365 (Apr 1, 2011)

humble_pie said:


> yes ... you might recall that i coached you at that time, here in cmf forum. You were excited then & it appears you're still excited.


True! You coached me... and thank you 
...and when I saw 1 time that after all settlements I have a little minus on the account, I just redeemed 1 unit of CAD MM....
One time TDW DRIPed dividend and for couple of days Imy account was in minus territory, until another dividend covered it....


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## humble_pie (Jun 7, 2009)

gibor i remember you did it perfectly, on your 1st attempt, in one or 2 minutes. It was a classic.

i'm happy to see you posting now to coach others. Your insights on little bits & pieces of cash that can get left over in a gambit operation are so helpful. Although i'm sure you'd agree that basically the tdw rrsp laundry comes out dazzling white, perfectly ironed & all buttons replaced ...


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## gibor365 (Apr 1, 2011)

Yes, HP! 
As you advised I did it in quite day in afternoon hours with TD. I just wrote down on spreadsheet quotes for TD-N and TD-T for some time and made sure there is no big fluctuations.
This week it took me more time , about 15 min, as my Internet crashed right after BUY TD-N and I should've kill all processes and restart it ... Surprisingly, when I logged back the prices were exactly the same!!! Can you beleive it?! (they fluctuate a little but came back to the same price).

Again, I like this feature of TDW, but to tell you the truth , I'm not sure which platform is better (TDW or CM).... If you have small amount ,lets say less than 3K and want to convert to US$, it doesn't make sense to use Gambit because of the trading fees.... and FX rate in TDW is much-much higher than in CM... (one time I did trades in half an hour period (and FX was flat) and TDW charged me ridiculously higher rate than CM


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## mart (Apr 2, 2012)

humble_pie said:


> gibor i remember you did it perfectly, on your 1st attempt, in one or 2 minutes. It was a classic.
> 
> i'm happy to see you posting now to coach others. Your insights on little bits & pieces of cash that can get left over in a gambit operation are so helpful. Although i'm sure you'd agree that basically the tdw rrsp laundry comes out dazzling white, perfectly ironed & all buttons replaced ...


I have to say that this thread was incredibly helpful to perform my gambit as well (especially the advice from goldstone). I was nervous but honestly, there's nothing to worry about. Just make sure you don't screw up when you enter the orders! :tongue-new:


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## Kaitlyn (May 13, 2011)

Wow, my transaction history is a mess... I think I have it figured out, but would love outside clarification.

1) Transfer in $15,0000
2) Buy $CDN BCE:
- 50 @ $44.71
- 100 @ $44.709
- 85 @ 44.69
- 100 @ 44.689
- 1 $9.99 comission
3) Sell 335 $US BCE @ $45.20 + $9.99 comission
4) Buy 200 $US KO @ $37.65 + $9.99 commission

Can someone please confirm how much cash I should have in:
- CDN cash
- US$ money market

Greatly appreciate the clarification


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## gibor365 (Apr 1, 2011)

about $16 CAD cash and 7792 in US MM


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## Kaitlyn (May 13, 2011)

I see $16.06 cash balance, but US MM is $7,401.93 in US MM ($7,478.00 market value)... 759.173 units


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## gibor365 (Apr 1, 2011)

Kaitlyn, you have to be sure that your BCE-N sell and KO-N buy were done with same FX rate.
For example in my account (sold TD-N, bought MCD-N): 
- TORONTO DOMINION BANK
WE ARE RELATED TO ISSUER
CONV TO CAD @0.6 %US PREM.

-MCDONALDS CORP
CONV TO CAD @0.6 %US PREM

This is all point of "US $ wash", if you have different rate -> "wash" didn't work.

p.s. note that on date of transaction was :
TORONTO DOMINION BANK
WE ARE RELATED TO ISSUER
CONV TO CAD @2.6 %US DISC
GQ*8234 ,
but next day this trans was reversed:
TORONTO DOMINION BANK
WE ARE RELATED TO ISSUER
CANCELLATION OF AUG 27,20
CONV TO CAD @2.6 %US DISC


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## Kaitlyn (May 13, 2011)

gibor said:


> Kaitlyn, you have to be sure that your BCE-N sell and KO-N buy were done with same FX rate.
> For example in my account (sold TD-N, bought MCD-N):
> - TORONTO DOMINION BANK
> WE ARE RELATED TO ISSUER
> ...


Hmm.. what I see is:
COCA COLA CO
CONV TO CAD @0.5 %US PREM
IH*8697

BCE INC
CONV TO CAD @2.5 %US DISC
AL*8299


and then these two transactions:
TD US M/MKT U$-I /NL'FRAC
WE ARE RELATED TO ISSUER
AS OF AUG 31,2012
CONV TO CAD @0.5 %US PREM

TD US M/MKT U$-I /NL'FRAC
WE ARE RELATED TO ISSUER
PROSPECTUS ENCLOSED
AS OF AUG 29,2012
CONV TO CAD @2.5 %US DISC


I'm very confused


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## gibor365 (Apr 1, 2011)

Sorry, I by mistake keyed in wrong number, you should have in US MM 7,592 and it's exactly matching number of units you got 759.17
So everything is correct.
You can see that FX rate of KO buy is matching 2nd MM FX rate (2.5%) and rate of BCE matching 1st MM rate (0.5)


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## Kaitlyn (May 13, 2011)

gibor said:


> Sorry, I by mistake keyed in wrong number, you should have in US MM 7,592 and it's exactly matching number of units you got 759.17
> So everything is correct.
> You can see that FX rate of KO buy is matching 2nd MM FX rate (2.5%) and rate of BCE matching 1st MM rate (0.5)



Any idea why the book (and market, I guess..) are both below the $7,592?

I really need to take a step backa nd figure all this out so next time isn't so crazy!


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## humble_pie (Jun 7, 2009)

kaitlyn you have a couple pennies under USD 7,592 in this MMF account, which is correct.

sell 335 bce for proceeds of 15,132 USD (rounded to ignore the penny.)
buy KO at cost of 7,540 USD.
remainder is 7,592 which is what you have.

pay no attention to the canadian dollar equivalent figures that show in the account. To keep track of USD in MMF you should look at number of units - 759.173 - & multiply these by $10. The missing pennies are likely due to miniscule US exchange fees connected to either your buy or your sell transaction.

turning now to the issue of FX fees being applied to US dividends dripped into tdw rrsp accounts that was recently discussed, i heard back from the tdw team managers. FX fees are applied to all US dripped dividends in reg'd accounts. They will refresh their staff & remind them to make sure clients understand correctly.


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## gibor365 (Apr 1, 2011)

HP is right, pay attention only on number of units in US MM . Multiple by 10 -> this is US$ you have.... 


humble_pie said:


> FX fees are applied to all US dripped dividends in reg'd accounts. .


This is bad... considering that TDW applies FX rate much higher that in CM, even with TDW US$ wash, you will lose much more if you gonna reinvest dividends for a long term


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## Kaitlyn (May 13, 2011)

humble_pie said:


> kaitlyn you have a couple pennies under USD 7,592 in this MMF account, which is correct.


Well it's more than $100 off, not a few pennies? :S



humble_pie said:


> turning now to the issue of FX fees being applied to US dividends dripped into tdw rrsp accounts that was recently discussed, i heard back from the tdw team managers. FX fees are applied to all US dripped dividends in reg'd accounts. They will refresh their staff & remind them to make sure clients understand correctly.


Ah, thanks for the update... but I'm not thankful for the bad news!


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## humble_pie (Jun 7, 2009)

gibor i am sorry to rain on your parade but i remember the first time you brought out the cm-FX-fee-is-better-than-tdw-FX-fee theory & i did not agree with you then. It seemed to me you were mixing up buy & sell rates in the currencies.

i notice you keep on bringing this up - how cm-FX-fee-is-better etc - but i have never agreed. I'm here, finally, to say that is simply not true. In reality the rates are probably so close there would not be, on a single dividend, as much as a drachma of difference between the 2 brokers.


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## humble_pie (Jun 7, 2009)

Kaitlyn said:


> Well it's more than $100 off, not a few pennies?


like i said, multiply the number of US mmf units by $10.

in your case you will get $7,591.73. What are missing are 27 pennies. No more, no less.


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## gibor365 (Apr 1, 2011)

humble_pie said:


> gibor i am sorry to rain on your parade but i remember the first time you brought out the cm-FX-fee-is-better-than-tdw-FX-fee theory & i did not agree with you then. It seemed to me you were mixing up buy & sell rates in the currencies.
> 
> i notice you keep on bringing this up - how cm-FX-fee-is-better etc - but i have never agreed. I'm here, finally, to say that is simply not true. In reality the rates are probably so close there would not be, on a single dividend, as much as a drachma of difference between the 2 brokers.


HP, I don't remember that you didn't agree... but never mind, as I mentioned before , one time I did a buy in CM and TDWfor US stock and compared the rates....and CM FX rate was much better.... I don't remember exatly the numbers, but i remember very well that than CAN$ was a little bit higher than $US, so in TDW I got amount in CAD still less than I invested in US$ and in CM amount in CAD was sttill bigger....
For dividends , sure you won't feel it for 1 or 2 years, but in 15-20 years the difference will be much higher....
As i mentioned I have accounts in both TDW and CM and I'm trying to get advantage as each of them has their own pluses. But certainly I can tell that investor that don't use TD e-series funds and don't mind to call for US$ wash -> will be better in CM....especially who does frequent trades...


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## humble_pie (Jun 7, 2009)

gibor said:


> HP, I don't remember that you didn't agree... but never mind, as I mentioned before , one time I did a buy in CM and TDWfor US stock and compared the rates....and CM FX rate was much better.... I don't remember exatly the numbers, but i remember very well that than CAN$ was a little bit higher than $US, so in TDW I got amount in CAD still less than I invested in US$ and in CM amount in CAD was sttill bigger....
> For dividends , sure you won't feel it for 1 or 2 years, but in 15-20 years the difference will be much higher
> 
> _(Originally Posted by humble_pie
> ...




gibor i didn't post anything about not agreeing with your cibc claim ... but i didn't agree ... each time you repeated, i didn't agree ... finally this time i thought i'd speak up ... i still don't agree ...

the fact is the bank-owned brokers are competitive & will tag each other extremely closely with their FX rates.

i just specifically checked cibc & tdw. The example i chose was $5000 USD to be converted into CAD. I phoned em both. 45 minutes ago.

cibc broker said rate was .9730. $5000 USD would produce $4865 CAD.

tdw said rate was .9725. $5000 USD would produce $4862.50 CAD.

one has to keep in mind these rates shift all the time so tdw rate could at times be better than cibc. In any event rates seem to be practically identical.


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## gibor365 (Apr 1, 2011)

HP, as I mentioned I have brokerage accounts in both and I have no interest in promoting one of them.... when I did trade in CM and TDW on the same hour and I saw that CM rate was much better, I also called TDW and spoke with back office who's dealing with FX rates and rep there mentioned that FX rate also depends on $ amount buy, more money I invest -> better trade I get...maybe CM has different policy.... I was telling about this case only because I saw real money on my both accounts (btw, I checked than CAD/USD rate and it practically didn't change at ll between 2 trades)... 
After this case, I was buying US equities only in CM accounts, until I read about Norbert gambit.


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## humble_pie (Jun 7, 2009)

gibor the rates i just quoted from this morning do *not* show a "much better" rate for cibc.

suggestion: won't you please track the rates at the 2 brokers every single morning at the exact same time. Please use the same example. Starting with USD 5,000 & buying CAD. Nothing else. Keep this up for a week, a month, whatever period of time you like. Rates will be extremely close i believe.

gibor i do remember your example as of the time you first posted about it. At that time, i did not feel you had quite understood. I thought, way back then, that you had possibly confused buying & selling information. Remember, there are actually 4 rates. There are rates for 1) buying USD, 1) selling USD, 3) buying CAD, & 4) selling CAD.

it's also highly unlikely that you would have converted identical amounts at precisely the same time at 2 different brokerages.


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## gibor365 (Apr 1, 2011)

HP, maybe it's highly unlikely , but I found my old post:
"_Maybe for somebody it will be interesting.... today i did 1 buy at TDW and 1 at CIBC Investor Edge. The time of buy practically the same 2 min difference. TDW gave me rate 0.992 and CIBC Investor Edge much better 1.009, meaning buy for amount 10K will save you with CIBC Investor Edge $170_".
Those rates I got no hypotetically calling, but in real money in my accounts. You may not to beleive me, but this is the fact. (and for sure i did not "confused buying & selling information")


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## GoldStone (Mar 6, 2011)

humble_pie said:


> turning now to the issue of FX fees being applied to US dividends dripped into tdw rrsp accounts that was recently discussed, i heard back from the tdw team managers. *FX fees are applied to all US dripped dividends in reg'd accounts.* They will refresh their staff & remind them to make sure clients understand correctly.


Two FX fees?

One fee to convert US dividends to CAD cash. Another one on the way back to buy dripped shares.

Correct?


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## humble_pie (Jun 7, 2009)

GoldStone said:


> ... Correct?



no, they haven't answered this part yet. 

all they have affirmed, so far, is what i mentioned. Yes, they said, FX fees are applied to all US dividends paid into tdw rrsps.

in the current round of emails, i'm asking for these details. In 2011 i enrolled a couple of US dividends in rrsp in drips. Examining my 2011 reg'd account statements now, i see one dividend in merck that seems to have been processed by hand. It dripped into additional shares with no FX fee. The other MRK drip dividend was subjected to FX fee. After that, i restored the rrsp dividends to cash divs. So my own statement is inconclusive.

please keep in mind that details about double FX fees on dripped US divs are exotic & arcane. Few know the facts. Fewer care, other than gimlet-eyed senior programmers in ottawa each: In due course the big green will probably provide an accurate & detailed answer, but i expect it might take a while because this topic is not a high priority right now.

all will be moot anyhow when tdw brings out the long-awaited USD rrsp.

.


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## GoldStone (Mar 6, 2011)

Thank you!


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## Kaitlyn (May 13, 2011)

I guess it doesn't totally matter, but does anyone know why it shows 200 shares, book value of $7,577.69? I did not buy it @ $37.88 - I bought @ $37.65.


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## GoldStone (Mar 6, 2011)

Book value is shown in CAD.


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## Kaitlyn (May 13, 2011)

GoldStone said:


> Book value is shown in CAD.


That makes sense! 

It's just book value of when it was bought right? It won't change each day as rates change?

Another chapter in the US$ in a TD RSP.. they can't even show US Stocks in USD?


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## GoldStone (Mar 6, 2011)

The true USD book value won't change each day (obviously). It will change if and when you reinvest dividends.

The bogus CAD book value? No clue. I pay no attention to it. I don't know if they store the initial converted value, or calculate it on the fly using the current forex rate.


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## larry81 (Nov 22, 2010)

Why is everyone still using interlisted stock (TD, POT, SU, RIM, etc.) when they can use the non-volatile DLR/DLR.U combo ?


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## GoldStone (Mar 6, 2011)

Low share price is a disadvantage. DLR closed $9.63 on Friday. Assume 2c spread in each direction, 4c total. Bid/ask spread amounts to 0.415% of the exchanged dollar volume. Check bid/ask spreads when the markers are open. I think they are actually worse than what I quoted.

You can do much better with highly liquid interlisted stocks thanks to higher stock prices and tighter bid/ask spreads.

That said, DLR/DLR.U combo is a perfect tool if you can't execute the gambit instantly. As, for example, in non-registered TDW account.


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