# Aug 2014 Norbert Gambit Questrade Margin Account



## slacker (Mar 8, 2010)

Just an entry here to document my Norbert Gambit on Questrade Margin Account

The amount is about $14k CAD

Note that Questrade would had charged 2% on margin account (or $288)

2014/08/20:09:45
- Place LIMIT order at 10.91 for about 1300 units, filled immediately
- Bid/Ask spread at 10.90 and 10.91 (i.e. about $6.50 paid to the spread)
- $0 commission for ETF purchase, but $4.62 ECN fees. (Later found out that ECN fee is charged for removing liquidity. Can be avoided if set LIMIT order to above or below the market rate. But then may not fill the order immediately)
- Note that Questrade says the average volume of DLR.TO is about 9k, so I find it amazing that it was filled right away
- Total cost: $11.12

2014/08/26:
- Observed that the DLR.TO has settled
- Emailed Questrade to journal the DLR.TO units to DLR.U.TO. I forgot to specifically say from CAD MARGIN to USD MARGIN. I hope that doesn't mess it up.

2014/08/27:
- Questrade emailed me this morning the request has been processed, and awaiting settlement. After settlement, can expect the trade platform to show the new position
- Confirmed on the website, that it is still showing DLR.TO

2014/08/29:
- Looks to have settled, I see that 1300 units of DLR.TO was sold (at $10.91), and 1300 units of DLR.U.TO was bought (fill price $9.97)
- Sell order at Bid/Ask at 9.96 , enter sell order at 9.97 . Hopefully, this doesn't "take liquidity from market", and I can avoid the ECN fee this time.
- Trade commission about $15

2014/09/02:
- Only 1100 shares was sold, because I didn't specifying AON (all or nothing)
- Entered another sell order, for the remaining 200 shares, had to pay another commission 
- Sold 1100 shares at 9.96
- Sold 200 shares at 9.95

Summary:
- Initial CAD balance: 
- USD balance 13869.29


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## Moneytoo (Mar 26, 2014)

I have a limit order for exactly 1000 shares (to avoid ECN fees - which are apparently charged on less than 100 shares orders or "leftovers") at $10.81 - waiting for a better exchange rate... but might give up and up the limit next week


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## yupislyr (Nov 16, 2009)

slacker said:


> 2014/08/26:
> - Observed that the DLR.TO has settled
> - Emailed Questrade to journal the DLR.TO units to DLR.U.TO.


You don't have to wait for DLR.TO to settle before you can request the journal be done. Save yourself some time and send the email right after you buy DLR.TO. The only time you may have to wait is if you are doing it in a registered account.


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## Uranium101 (Nov 18, 2011)

So much trouble lol. I am doing it with RBC Direct Investing.

Step 1: Buy whatever you want at CAD side of the market for $9.95 CAD flat
Step 2: Sell whatever you bought in step 1 at the USD side of the market for $9.95 USD flat
It can be completed in less than a minute. You now have the money.
Although you will see positive shares on the CAD side, and negative shares (short) on the USD side, but it will cancel each other out in 2 business days. It won't affect anything else.


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## Moneytoo (Mar 26, 2014)

Uranium101 said:


> So much trouble lol.


For half of the commission it's worth it (no commission for buying DLR, so only had to pay 9.95 USD for selling DLR.U. The only "trouble" was asking an agent in Live chat to journal - got an email confirmation that it's done the next business day)

When I did Norbert's Gambit at TD Waterhouse, ended up paying triple commission: one for buying and two for selling (also had an odd lot like OP that was broken down in two) So 1000 shares of DLR in Questrade (with limit orders to buy and sell) looks like the way to go (I don't get this obsession with converting as soon as possible - dollar goes up and down all the time, you wait a few days - you get a better rate  Bought DLR for $10.81, sold DLR.U a week later for $9.97)


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## Uranium101 (Nov 18, 2011)

Moneytoo said:


> For half of the commission it's worth it (no commission for buying DLR, so only had to pay 9.95 USD for selling DLR.U. The only "trouble" was asking an agent in Live chat to journal - got an email confirmation that it's done the next business day)
> 
> When I did Norbert's Gambit at TD Waterhouse, ended up paying triple commission: one for buying and two for selling (also had an odd lot like OP that was broken down in two) So 1000 shares of DLR in Questrade (with limit orders to buy and sell) looks like the way to go (I don't get this obsession with converting as soon as possible - dollar goes up and down all the time, you wait a few days - you get a better rate )


The thing with RBC is that you pay only $9.95 for each order even if that order got executed multiple times (on the same day).


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## Moneytoo (Mar 26, 2014)

Uranium101 said:


> The thing with RBC is that you pay only $9.95 for each order even if that order got executed multiple times (on the same day).


But you still have to pay commission for buying - and ETF purchases are free at Questrade  Anyways, whatever works - I just don't understand in general why rush to buy CAD and sell USD on the same day. From my limited experience, you can buy DLR for 10-20 cents less and sell DLR.U for a cent or two more if you wait for a CAD to be above 92 cents to buy and below to sell. But maybe time is money for traders?


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## Uranium101 (Nov 18, 2011)

Moneytoo said:


> But you still have to pay commission for buying - and ETF purchases are free at Questrade  Anyways, whatever works - I just don't understand in general why rush to buy CAD and sell USD on the same day. From my limited experience, you can buy DLR for 10-20 cents less and sell DLR.U for a cent or two more if you wait for a CAD to be above 92 cents to buy and below to sell. But maybe time is money for traders?


I don't trade stocks. Usually when I deposit more fund into my investment accounts is because I want to buy something. And whatever I like to buy are usually getting hammered on the same day. One could argue that I should wait a few more days so that I can get them cheaper. True, and also false. I have experienced both. However, when I got in a bit high, and it plummet further, I just buy more.


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## Moneytoo (Mar 26, 2014)

Uranium101 said:


> I don't trade stocks. Usually when I deposit more fund into my investment accounts is because I want to buy something. And whatever I like to buy are usually getting hammered on the same day. One could argue that I should wait a few more days so that I can get them cheaper. True, and also false. I have experienced both. However, when I got in a bit high, and it plummet further, I just buy more.


From my first attempts I learned that the impatient pays twice, so now converting CAD to USD in advance - and then waiting for a good price (but since I have free trades till mid-October, will try "buy some now and more later" approach )


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## Uranium101 (Nov 18, 2011)

Moneytoo said:


> From my first attempts I learned that the impatient pays twice, so now converting CAD to USD in advance - and then waiting for a good price (but since I have free trades till mid-October, will try "buy some now and more later" approach )


When the price is right, I strike. When the price is better, I strike more lol.
I am not a bottom Fisher as Peter Lynch puts it. One can never get in at or close to the bottom.

There was this one stock I wanted to buy back in 2011. It hit 10.18 lowest. I set the price to buy at 10.15. That order was never executed. Then the stock soared all the way to $22. Along the way, a few quarters of dividends were paid. At the price of 10.40, the dividend yield was 4.5%. The lowest price I got in was 11.55.


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## Moneytoo (Mar 26, 2014)

Uranium101 said:


> When the price is right, I strike. When the price is better, I strike more lol.
> I am not a bottom Fisher as Peter Lynch puts it. One can never get in at or close to the bottom.
> 
> There was this one stock I wanted to buy back in 2011. It hit 10.18 lowest. I set the price to buy at 10.15. That order was never executed. Then the stock soared all the way to $22. Along the way, a few quarters of dividends were paid. At the price of 10.40, the dividend yield was 4.5%. The lowest price I got in was 11.55.


Well I meant a more prosaic case of doing the Norbert's gambit and buying the stock on the same day  I was watching Starbucks for a few weeks, and when it dipped to $70 (on its ex-div date I believe), told my husband to buy now! (He had a lot of cash in his account that I was helping to deploy )

He did the gambit, bought the stock - it was on Thursday. And Monday, when all 3 orders were supposed to settle, was Victoria Day. A holiday in Canada, but not in the States. So he got USD a day after he needed them, but on Monday more if his CADs were converted to USDs by regular bank's spread. If we bought Starbucks for $70.50 or even $71 on a Friday - still would be cheaper 

So now I'm trying to convert CAD to USD in advance, when the exchange rate is good (not necessarily the best) - so I don't need to worry anout tbe holidays and always have some if the stock or ETF I'm watching dips


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## peterk (May 16, 2010)

slacker said:


> 2014/08/26:
> - Observed that the DLR.TO has settled


Where does Questrade indicate that a trade has settled or not? Last time I did this I just waited 3 days and it worked out hunky dory. The process I follow is outlined here.


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## Silverbird (Mar 5, 2013)

Not sure if I was the only one who didn't know, but you have to use stocks with the same CUSIP to do the gambit.

I've previously done DLR -> DLR.U without issue, but thought I'd try ZSP -> ZSP.U on Questrade.

It was a no go, but only after a week, as I submitted the request, which was accepted, waited the 4 Business days for it be reflected in IQ (normally there in a day or 2), sent a followup and it took a few days to get to the bottom of it - Questrade can only journal over between stocks with the same CUSIP.

Looks like I now need to sell of the ZSP and start over with DLR

Looked and DLR and DLR.U are both CUSIP: 44049C302
ZSP: 05575T100
ZSP.U: 05575T118


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## humble_pie (Jun 7, 2009)

Silverbird said:


> Not sure if I was the only one who didn't know, but you have to use stocks with the same CUSIP to do the gambit


yes, we knew.

i've mentioned this to a couple of people.

gambit traders should prepare & review their trades extremely carefully. Don't fool around & don't try with exotic stocks that you think might be interlisted. 

there are really only a handful of suitable carrier stocks with high liquidity, such as the bank stocks. Then there are the DLRs which have been custom-built for gambit purposes.


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## Feebz13 (Jun 23, 2011)

Quick question about this move. Attempted it a few days ago and it was pretty easy. Just a quick question.

Bought ~500 shares of DLR.TO in my TFSA, called Questrade and asked them to journal the shares. The gentleman on the phone did it instantaneously and said you should be good to trade DLR.U.TO. The stocks were visible in my portfolio on IQ essential. 

I asked if I had to wait for settlement and he said no. So I sold them immediately. Awesome! 
One issue, my iqessential balance is still listed in CAD. When I look at my exchange funds requests in myquestrade there is a SELL USD request listed as PROCESSED.


Am I correct to assume that in a few days the amount will be listed in USD?


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## m3s (Apr 3, 2010)

IIRC the cash balances at Questrade update at midnight or something. Is it fixed today?


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## Feebz13 (Jun 23, 2011)

m3s said:


> IIRC the cash balances at Questrade update at midnight or something. Is it fixed today?


Still showing up as CAD balance. I'll give them a call tomorrow. Hopefully all is good.


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## Feebz13 (Jun 23, 2011)

Embarrassing and word of advice. Here's what happened. In my account preferences my currency settlement was set to CAD. It must be set at currency of transaction. Fixed this and then I re-did the process over the phone again. Unfortunately this agent could not do it instantaneously. Odd, have to wait ~2 days per her for settlement.

Lesson learned.


Feebz13 said:


> Still showing up as CAD balance. I'll give them a call tomorrow. Hopefully all is good.


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