# Executing Norbert's Gambit at Scotia ITrade



## mrcheap (Apr 4, 2009)

Hi all,

I went through exchanging currency using DLR with the Norbert's Gambit at iTrade and thought I'd post my experience for others thinking about doing the same. Everything has now settled.

December 12th:
-exchange rate according to Google, 1 CAD = 1.0164 USD
-transferred $10 from my CAD account and got $9.95 in my USD account (actual amount wasn't confirmed until the following day).
-HORIZONS U.S. DOLLAR CURRENCY ETF UNIT CL A	DLR	Dec. 12, 2012	Dec. 17, 2012	CAD	BUY	800 9.770 -7,816.00

December 28th:
-HORIZONS U.S. DOLLAR CURRENCY ETF UNIT CL A	DLR	Dec. 28, 2012	Jan. 3, 2013	USD	SELL	-800 9.900 7,910.01

I tried twice to journal over the shares using a special request on their website and this didn't work (which is why the sale was delayed so long). I never heard anything back from Scotia. I didn't get a confirmation number, which a trader I eventually spoke to said would indicate that there was a problem with the website (i.e. my request wasn't submitted).

I finally called and talked to a customer service rep and asked for the shares to journalled over (on Dec 27th). On the 28th they were in my USD account, but within my USD account it had it marked as a Canadian security. Whenever I tried to input a sale order it would warn that there would be a currency conversion. I called iTrade again, talked to customer service rep who kept telling me that the security was the same in both currencies and that he didn't understand what I wanted. Eventually I just wrapped up my call with him, called back immediately and talked to another CSR who eventually transferred me to a trader. The trader said I should have gone directly to him (that the CSR reps wouldn't understand) and that I wouldn't be charged the $45 trading fee because what I wanted to do couldn't be done on the website. He seemed to understand right away that when I said I wanted DLR sold as a USD security (and didn't want a currency exchange) and after leaving me on hold for 5 minutes or so he said the trade should happen shortly (which it did).

I wasn't charged a commission for the purchase, but was charged 9.99 for the sale (the above sale should have given me 7920 USD). I just put in a market order for the sale.

From my calculations the fee for the cash exchange was 2.14% (10 -> 9.95 = 0.995, 1.0164-0.995 =0.0214) whereas with the gambit it was .43% ($7816->$7910.01 = 1.012, 1.0164-1.012 ~= 0.00437). This reduced my currency conversion costs from $167.26 to $34.17 (plus the $9.99 commission). 

Michael James did a conversion with BMO: http://www.michaeljamesonmoney.com/2012/03/trying-norbert-gambit-at-bmo.html

The Canadian Capitalist has wrote about the process: http://www.canadiancapitalist.com/a-foolproof-method-to-convert-canadian-dollars-into-us-dollars/


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## Jungle (Feb 17, 2010)

DLR trade is free with Scotia ITrade, check under their 50 + comission free ETFS. 

Sorry to hear about your experience with ITrade. 
I just moved our non-reg there too. 
Made my first trade last week, it's taking 4-5 days to settle? Questrade seemed a lot faster. But their service is horrible, I would never go back with the assets we have now.


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## mrcheap (Apr 4, 2009)

Actually the experience wasn't TOO bad (and well worth the savings). I'm not sure how the free trades work, but if you look at the info from the sale you'll see I was charged $9.99 (800 * 9.9 = 7920).


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## Jungle (Feb 17, 2010)

Call them back, that is supposed to be a free trade. I just checked the website, DLR is still listed as a free trade ETF>


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## Worm (Nov 18, 2012)

I think the difference is, when you sell to generate USD you are actually selling DLR.U which is a different ETF. I'm with QTrade and it works this way. To buy DLR is free, but to sell DLR.U isn't. I don't mind though it is still an easy and cheap way to convert cash.


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## slacker (Mar 8, 2010)

Thanks for sharing.


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## slacker (Mar 8, 2010)

Anyone experiencing liquidity issues with DLR?

I placed a limit bid of 9.88 for about 2000 units of DLR.TO today at noon, but it was not filled...


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## mrcheap (Apr 4, 2009)

I finally got around to calling today. Was left on hold for a LONG time, but they gave me back the selling commission. The CSR said they charged me because I called in to a broker and should have sold it electronically (however, the broker agreed with me that I COULDN'T sell it electronically and needed to call in - I specifically asked about this). Not sure how that will impact the future, but getting the $9.99 back is nice.


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## CanadianCapitalist (Mar 31, 2009)

Thanks for sharing mrcheap. Michael James also mentioned that he was unable to sell DLR.U on BMO.

slacker, not sure I understand your post. The ask on DLR is now $10. Even though the day's volume is only 3,000, the ask size is 272 lots, which is 27,200 shares. The bid size is 67 or 6,700 shares. I've never had a problem buying or selling DLR or DLR.U. 2,000 shares will usually not be a problem.


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## Loon (Apr 12, 2012)

Are you paying $30 per quarter at Scotia iTrade for keeping money/stock on the $US side of the account?


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## mrcheap (Apr 4, 2009)

Loon said:


> Are you paying $30 per quarter at Scotia iTrade for keeping money/stock on the $US side of the account?


No, I'm not paying anything per quarter. I think you might be referring to the "US-Friendly RRSP account". My account is just a standard, free US dollar trading account.


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