# TD Waterhouse RSP Auto Wash Trade Expectations



## 0xCC (Jan 5, 2012)

I've been procrastinating setting up auto-wash trades in my TD Waterhouse RSP account mostly because I don't actually do a lot of trades and my understanding was that dividends couldn't be auto-washed. So I didn't have a lot of motivation to make the phone call to set up auto-wash trades.

With the recent market slump I was looking to increase my US holdings and wanted to move low 5 figures of CDN$ to US$. So I made the phone call to set up auto-wash trades. I got read the standard boiler-plate agreement thing and I was told that auto-wash would be turned on for my account later that day (I called before the market opened).

Later that same day I purchased DLR in my RSP account. That trade went as expected and everything was fine. Two days later I sold DLR.U in my RSP account. That trade had a settlement date of today. I was expecting to see at some point between the trade date and the settlement date an extra transaction that would take the proceeds of my DLR.U sale and without any FX have them put into the TD US money market fund. As of this morning it looks like that isn't what is happening. The purchase of DLR and the sale of DLR.U are in my "recent activity" list on the account and the sale of DLR.U includes a note about converted to CDN$ @ a 8.something% US premium.

So my question is, should I wait until tomorrow to see how things actually shake out or should I have already seen the purchase of the TD US MM fund happen if auto-wash trades are turned on for my account?


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## humble_pie (Jun 7, 2009)

0xCC said:


> Later that same day I purchased DLR in my RSP account. That trade went as expected and everything was fine. Two days later I sold DLR.U in my RSP account. That trade had a settlement date of today. *I was expecting to see at some point between the trade date and the settlement date an extra transaction that would take the proceeds of my DLR.U sale and without any FX have them put into the TD US money market fund*. As of this morning it looks like that isn't what is happening. The purchase of DLR and the sale of DLR.U are in my "recent activity" list on the account and the sale of DLR.U includes a note about converted to CDN$ @ a 8.something% US premium.



first off, congrats, you have understood this procedure very well.

i think all is probably going to be OK. Do you see that sentence i bolded just above? that is what is *not* going to happen.

one has to remember that in a tddi registered account, every single little trade, dividend, cough, whisper, dot & comma is going to be reported in canadian dollars. That's the system they are using & as you know, they are sticking to it like grim death (no sign of dual-currency reg'd accounts before 2015 but that's another story.)

so what u are seeing is, so far, quite normal.

another thing - it does seem to take an extra day past settlement for mutual fund transactions in tddi web accounts to update themselves. USD MMF is a mutual fund, after all.

an excellent thing to do when gambitting currencies is to scribble down every single USD price that you see. Including commissions if any. One can use these figs to calculate exactly how many units of USD MMF one should end up with.

back in the day when we had to "wash" all our own currency trades ourselves, i'd always do this. I still do the calculation, as a way of checking up on the big green. What i've found so far is that their auto-washing team does a great job. Others have reported the odd mistake here or there but all my transactions have been perfect. 

perhaps it's not widely-known but there's nothing *auto* about auto-washing. It's all done by hand by a dedicated team at a tddi call centre. They're pretty dam good at it, according to my checkups!

so always keep your USD figs, wait a few days & see what happens.

in the remote chance this story does go wrong, i'd call the big green & ask for grace on this, my very first gambit attempt. They maybe can't credit a few dollars in FX fees into an rrsp account, but they could put the amount in your cash or margin account.


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## gibor365 (Apr 1, 2011)

Just wondering why in RRP you use DLR, trading interlisted stocks much more clear and easy


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## gibor365 (Apr 1, 2011)

humble_pie said:


> perhaps it's not widely-known but there's nothing auto about auto-washing. It's all done by hand by a dedicated team at a tddi call centre. They're pretty dam good at it, according to my checkups!


I was told exactly the same by TD reps.... taking in consideration that more and more investors want auto-wash feature, I just don't understand how is profitable for TD to hold huge data-entry team, instead of just give FX preferable rates for RRSPs like CIBC does ?


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## humble_pie (Jun 7, 2009)

PS when entering the DLR.U sell order, which currency did you order it to be sold in? this might have led to a tiny glitch ...


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## 0xCC (Jan 5, 2012)

gibor said:


> Just wondering why in RRP you use DLR, trading interlisted stocks much more clear and easy


It was my first time doing an interlisted trade and I just wanted to keep it simple conceptually and I didn't want to have to deal with moving stock prices (I was expecting to hold onto the stock for at least a day because I wanted to give time for the auto-wash to kick in). I'm not sure I would use DLR again mostly because it didn't seem to be very liquid.

Humble, thanks for the confirmation. I will wait to see what happens tomorrow. I'm half expecting to see that I suddenly have a little less CDN$ than when I started but I'm still hopeful. 

Can you give examples of what numbers you track when doing FX related trades?


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## 0xCC (Jan 5, 2012)

humble_pie said:


> PS when entering the DLR.U sell order, which currency did you order it to be sold in? this might have led to a tiny glitch ...


I'm pretty sure I sold on the US market. I did get a warning about the settlement currency not being the same as the currency of my account and I had to check the little box...


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## humble_pie (Jun 7, 2009)

gibor said:


> I was told exactly the same by TD reps.... taking in consideration that more and more investors want auto-wash feature, I just don't understand how is profitable for TD to hold huge data-entry team, instead of just give FX preferable rates for RRSPs like CIBC does ?



don't forget gibor that some time ago the big green was light-years ahead of all other monocurrency rrsp brokers with their auto-wash feature.

including your precious cibc which in those years was FXing clients blind on every single stock & dividend transaction in registered account :biggrin:

it's true the TD has fallen behind these days. But i imagine they will catch up sooner or later.

speaking of the precious cibc, how are they doing with the 9.95 flat rate commish for small accounts, have they joined the parade? :biggrin:


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## humble_pie (Jun 7, 2009)

0xCC said:


> I'm pretty sure I sold on the US market. I did get a warning about the settlement currency not being the same as the currency of my account and I had to check the little box...


good (u did all this very well)

as i say, if things don't turn out properly in the end, you could hurl yourself upon their mercy. The TD certainly does need good investor clients like yourself these days.


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## GoldStone (Mar 6, 2011)

0xCC said:


> Two days later I sold DLR.U in my RSP account. That trade had a settlement date of today. I was expecting to see at some point between the trade date and the settlement date an extra transaction that would take the proceeds of my DLR.U sale and without any FX have them put into the TD US money market fund.


Check your orders. The settlement date is today. You should see a *filled* order to buy TD US MMF (TDB166). If that filled order is not there, something is wrong. Call them ASAP.

I do wash transactions on a regular basis. They always work the same. An open order to buy (sell) MMF shows up on T+1 or T+2. It gets filled in the morning on T+3. MMF balance and activity update on the same day (T+3), a couple of hours after the market opens.

I never use DLR so that might the root cause of the problem. Call them.


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## 0xCC (Jan 5, 2012)

humble_pie said:


> good (u did all this very well)
> 
> as i say, if things don't turn out properly in the end, you could hurl yourself upon their mercy. The TD certainly does need good investor clients like yourself these days.


Thank you sir. If this doesn't work out as I hope it does (and I can't get it "fixed" after the fact) I might have to think about moving my US holdings to a brokerage that can actually handle US$ separately.

I really, really hope that the reports of hoping to have something in place by Q1 2105 that I have seen on other threads here are true. I understand that it is a big undertaking for TDW to move the systems over to be able to properly support multi-currency registered accounts but as an investor it is tough to be looking over the fence at the greener grass, especially every time I see the FX conversion on US dividends in my registered account.


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## humble_pie (Jun 7, 2009)

GoldStone said:


> Check your orders. The settlement date is today. You should see a *filled* order to buy TD US MMF (TDB166). If that filled order is not there, something is wrong. Call them ASAP.
> 
> I do wash transactions on a regular basis. They always work the same. An open order to buy (sell) MMF shows up on T+1 or T+2. It gets filled in the morning on T+3. MMF balance and activity update on the same day (T+3), a couple of hours after the market opens.
> 
> I never use DLR so that might the root cause of the problem. Call them.



strange it doesn't work like that in my reg'd account at all. There's always a delay for MMF settlement. Drat! i must have some kind of inferior quality account!

i agree that it appears the gold stone does likes to call em, call em, call em, call em ASAP P P P over a few dollars here or there, though :biggrin:


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## 0xCC (Jan 5, 2012)

Oh, looky, looky:
12-Feb-2014 12-Feb-2014 TD US M/MKT U$-I /NL'FRAC BUY

Now I'm still a little confused. The dollar amount of the purchase is the same (to the cent) as the dollar amount of the sale of DLR.U. But it seems like the dollar amount of the sale of DLR.U is *post* conversion.

The way my trades went is I bought DLR @ 11.08 CDN$. I sold DLR.U at $9.99 US$ and I got a 8.45% US premium. If I take the 9.99*# of units I sold -9.99 commision * 1.0845 I get the dollar amount listed in the net amount column. That seems to me like it went through a currency conversion. Then there is the BUY of TD US MMF at the same net amount. So should I expect to see another transaction appear overnight tonight or something?


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## GoldStone (Mar 6, 2011)

The OP should see a filled order for US MMF. Today. On the settlement date for DLR.U sale. This is indisputable.

If the filled order is not there, the issue isn't going to resolve itself. Better to call sooner rather than later.


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## 0xCC (Jan 5, 2012)

GoldStone said:


> Check your orders. The settlement date is today. You should see a *filled* order to buy TD US MMF (TDB166). If that filled order is not there, something is wrong. Call them ASAP.


Thanks GoldStone, I checked before market open and I didn't see anything but as noted there is a trade there now. I'm still slightly confused about the total amounts though.


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## GoldStone (Mar 6, 2011)

What you posted is a snapshot of account activity. Check Order Status under Account Details.


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## 0xCC (Jan 5, 2012)

GoldStone said:


> What you posted is a snapshot of account activity. Check Order Status under Account Details.


Yep, that is it. The numbers in the Order Status page show the expected amounts (and the quantity in the recent activity page shows the correct amount assuming $10 units).

I was expecting to have to make a phone call about all of this. Nice to have it actually work out.

So in the end I moved 5 figures of CDN$ to US$ for 9.91% (i.e. I have 9.91% fewer US$ than the CDN$ I used to buy DLR) when the dollar was trading just under $0.90 (anyone want to check the exchange rate on Feb 5 which is when I bought DLR?).


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## GoldStone (Mar 6, 2011)

0xCC said:


> Yep, that is it. The numbers in the Order Status page show the expected amounts (and the quantity in the recent activity page shows the correct amount assuming $10 units).


That order was placed on T+1 or T+2. You can see the open order in WebBroker. You could have checked the amounts before order filled.


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## 0xCC (Jan 5, 2012)

GoldStone said:


> That order was placed on T+1 or T+2. You can see the open order in WebBroker. You could have checked the amounts before order filled.


Next time I will be sure to check the order status page. I was expecting things to sort of happen in the background and then show up in the Recent Activity page (which it did, but it just took until the trade happened to show up which makes sense).


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## humble_pie (Jun 7, 2009)

0xCC said:


> I was expecting to have to make a phone call about all of this. Nice to have it actually work out


yes it worked out, like i said.



> (anyone want to check the exchange rate on Feb 5 which is when I bought DLR?).


u have to check for yourself. Use XE dot com or bank of canada noon rate. 

even gambitting actual stocks - RY & TD are good gambit carrier stocks - one will not obtain an exact bank of canada rate, but one will be within a few basis points so one is more than happy.

the DLRs have a slight fee built into their spread so i've never used em.

also keep in mind that the DLRs don't work from USD to CAD. Only DLR.U is pegged, so anyone travelling USD to CAD opens the gambit to currency risk. Might as well go with TD bank stock.


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## gibor365 (Apr 1, 2011)

humble_pie said:


> don't forget gibor that some time ago the big green was light-years ahead of all other monocurrency rrsp brokers with their auto-wash feature.
> 
> including your precious cibc which in those years was FXing clients blind on every single stock & dividend transaction in registered account :biggrin:
> 
> ...


HP, from my check, TD introduced auto-wash about same time when CIBC introduced trading at preferable rates 
About rates for small account, i don't really care  I know that from day 1 when i started dealing with CIBC IE (and it was about 3 years ago) , Ihave flat trading fees of 6.95 and no any administration fees....


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## gibor365 (Apr 1, 2011)

0xCC said:


> It was my first time doing an interlisted trade and I just wanted to keep it simple conceptually and I didn't want to have to deal with moving stock prices (I was expecting to hold onto the stock for at least a day because I wanted to give time for the auto-wash to kick in).
> Can you give examples of what numbers you track when doing FX related trades?


I didn't mean DLR/DLR.U as interlisted trade , I meant that you can buy POT or TD on TSX and sell it right away on NYSE (no need to wait at all), if you're doing it on quiet afternoon, there is practically no chance that price will move significantly in 30sec until you enter numbers


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## 0xCC (Jan 5, 2012)

gibor said:


> I didn't mean DLR/DLR.U as interlisted trade , I meant that you can buy POT or TD on TSX and sell it right away on NYSE (no need to wait at all), if you're doing it on quiet afternoon, there is practically no chance that price will move significantly in 30sec until you enter numbers


Yes, I understood what you meant. My reason for buying DLR was that I locked in the exchange rate at the time of the purchase and then I didn't have to worry (too much, there is a little bit of variation on the DLR.U side but only a penny or two) about the timing of the sale on the US side. I wanted to wait longer than a couple of hours because it was my first trade for FX purposes and I didn't want to introduce another layer of market risk. Now that I have gone though the process once I will probably try something else (like TD or RY or whatever) the next time I want to do some conversion.


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## humble_pie (Jun 7, 2009)

gibor said:


> HP, from my check, TD introduced auto-wash about same time when CIBC introduced trading at preferable rates


gosh no the big green had a more rudimentary version in place 5 or 6 years ago ... we'd phone for it ... the "auto" feature came later ... i always believed they introduced "auto-wash" because so many clients were doing it themselves but making mistakes. So the big green realized it would take them less time in the end to just do the laundry properly themselves in the first place. That way they'd avoid having to deal with all those phone calls from customers fretting about how they'd lost a sock or a button in the wash.

when i do gambit in td rsp i always have at least 5 trades, everything having to be done within 10 minutes. 1) sell unrelated canadian security; 2) buy interlisted security in CAD; 3) sell interlisted security in USD; 4) buy US security in USD; 5) sell US option on same US security.

at the end of the cascade i figure out how many USD MMF units i should end up with - there will always be a leftover USD amount plus the USD option & stock transactions have different settlement dates, so 2 different MMF transactions are involved.

but LO! and BEHOLD! without exception it's always happened that the big green will eventually come around & dole everything out into its exact rightful place.


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## 0xCC (Jan 5, 2012)

humble_pie said:


> u have to check for yourself. Use XE dot com or bank of canada noon rate.


So XE dot com says on Feb 5 1 CDN$ is 0.9007676644 US$. For my trades I paid $11.08 for DLR and sold at 9.99 (not counting commissions). That is a 0.9016245 rate which is a 0.000856884 difference (0.0857%). A little better than the 1.5% that a regular trade would have cost me if my math is right. Commissions added between 0.1% and 0.2% (for the low 5 figure amount I moved).

Is my math correct?


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## humble_pie (Jun 7, 2009)

0xCC said:


> ... my math correct?



oxC i hope you won't mind if i take the bank of canada noon rate. It has only 4 decimal places & i try to keep things simple.

on 5 feb/14, the boc rates were 1.11/.9008.

that .9008 is the same as your XE dot com but minus several decimals, no?

you bought DLR at 11.08 CAD but sold DLR.U for 9.99 USD (i'm ignoring commissions & time lapse of 2 days) (keeping things simple.)

if you had bought DLR & sold DLR.U tout de suite, the BOC rate would have delivered a sell price in the neighbourhood of 9.98, no? (11.08*.9008)

but you sold for 9.99. This looks fine to me!

as for the 1.0845 FX rate you mention, the TD does have to use some exchange rate or other to perform the wash operation, would you not agree? it doesn't really matter what FX rate they use as long as the funds get washed out the same day, no? they could go with 2% or 3% & the results would be the same?

some persons are disoriented by the fact that the tddi registered account platform is so relentlessly monocurrency. Such persons would do better at a true dual-currency USD reg'd account broker, i do believe. However, other people can handle the always-shifting currency relationship just fine.

i for one am usually surprised by the accuracy & the skill the TD reps have when they explain currency equivalents in rrsp to clients. They are maybe not good enough yet with dividend FX transactions, but they do seem knowledgeable & helpful with the capital transactions.


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## 0xCC (Jan 5, 2012)

Thanks Humble, yes using. 9008 looks like things basically hit that BoC rate or slightly better. It all seems very reasonable to me. Now if I had only waited until this week to do the initial buy I would have got a better rate.


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## humble_pie (Jun 7, 2009)

0xCC said:


> Thanks Humble, yes using. 9008 looks like things basically hit that BoC rate or slightly better. It all seems very reasonable to me. Now if I had only waited until this week to do the initial buy I would have got a better rate.


.

in fact i think your way is the best way.

when trying out something new, proceed one step at a time. Check to make sure each footing is sound. Only after all is secure, next step forward.

it's a great way not to fall down each:


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