# Best Ways to Convert Large Amounts of USD to CAD?



## timothius (Jun 7, 2010)

With my work I get paid in USD every month from multiple sources. I move it through my RBC USD personal account and transfer it to my online brokerage account @ Scotia iTrade.

The amounts I'm dealing with are upwards of $10,000 USD/month.

*What I'm asking is the best way to convert the USD to CAD each month to pay bills and such*. _Also any ideas on what I should do with the money to passiblely earn a little more coin is much appreciated!_. The excess money I either put in US Stocks in iTrade's USD cash optimizer account which pays 0.065%. I know the ING Direct USD savings account (which I have some money) in as well pays 0.075%, but that's pretty much the highest I've found.

I've read this thread about buying interlisted stocks in USD and have them journaled and sell them in CAD. Assuming the market stayed in the same place, you would save a minimum of 1.5%. However, I talked to iTrade and they said the trade would have to place the trade, let it settle (3 business days) and then ask them to journal it which would take 1 additional business days = 4 business days. A lot can happen to a stock in that amount of time. However, if it's a stock you already own, or want to own and think it is decent value, I suppose you just earned yourself and 1.5% discount. *Sound right?*

My other methods of converting USD to CAD is through PayPal which I can usually move at 1.3-1.5%. If the USD is in my RBC account, I can also move it through XE.com which is consistently 1.5%+.

Again, any other ideas on converting this amount of money each month? Also, any ideas on what to do with the USD that I would rather notinvest?


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## humble_pie (Jun 7, 2009)

it doesn't sound quite right. Gambitting is a fairly complex strategy easily carried out by pairs traders but perhaps daunting to some without pair trading experience.

an important component of the strategy is understanding how each online broker's trading platform is configured, in order to understand what can & cannot be accomplished.

for example, tdw's rrsp trading platform permits seamless, perfect online gambitting, as one poster in this forum has recently shown so brilliantly.

however, the same tdw trading platform can and does lead to trouble for parties attempting to gambit in tdw cash & margin accounts. This is why the posted messages for tdw are mixed, with some tdw clients being refused outright by td trading reps.

the reported remarks from scotia itrade are also typical of the blocks that can be presented to traders attempting to gambit. Among the problems that the brokers legitimately face are the 3-day settlement period, and also the rule against shorting the box, ie rules that prevent an investor from being both long & short the same stock in same account.

there is no Giant Manual In The Sky that tells investors which platform at which brokerage will be able to execute a gambit pair of trades. However, some of the solutions include shorting the stock first in the desired currency, then buying the stock in the opposite currency in a different account, which will eventually be journalled to cover the short position. However, some online brokers charge a fee to journal between accounts.

another solution, which would take longer to put in place but will be far simpler to operate once it's up & running, will be to conduct partial or half-gambits. In other words the investor would buy canadian interlisted stocks on new york with US dollars. He will never overpay for these stocks, because the arbs always keep the prices in both markets picked to the bare bone, which is the wholesale exchange rate that our investor wishes to obtain. In every case, the investor would be purchasing canadian stocks that he wishes to own for their own merits. The only wrinkle is that he's buying them on new york.

when these purchases settle, the investor would have the stocks journalled to his canadian account. He would then, from time to time, sell some of these stocks as needed, for proceeds in canadian dollars. The foregoing is not a perfect gambit, and there is a market trading risk. However, seen from the perspective that the investor made a valid investment decision to buy XYZ in the first place, he is bearing that market risk at all times anyhow.

more exotic solutions include shorting an interlisted canadian stock in the desired currency, ie on toronto, while using USD to buy US calls in the same stock to cover the short position.

another and very different choice that a person who is frequently exchanging significant amounts at regular intervals might consider is an account at Interactive brokers, which offers forex trading where USD/CAD pairs can be traded for tiny commissions.


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## slacker (Mar 8, 2010)

For that amount of money, Interactive Brokers is probably the best bet. They charge 0.2% for that amount of money.


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## MikeT (Feb 16, 2010)

Xetrade is likely cheaper, at least it was a few years back.

If doing a gambit, sell the stock short first, then buy the stock second (same day, same minute actually). Just run it by your brokerage first to make sure it'll work.


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## Rysto (Nov 22, 2010)

My understanding is that Norbert's Gambit only works seamlessly in TDW registered accounts, because there aren't separate USD and CAD accounts. From what I've heard(I've never tried it myself), Norbert's Gambit is just as much a pain in TDW non-registered accounts because of the journalling.

However, there is a variant of Norbert's Gambit that should work in any non-registered account with separate CAD and USD subaccounts. You can do a short sale of an interlisted stock on one exchange and immediately buy the stock on the other exchange. On the settlement date, call the broker and ask them to journal the long position to the other account to cover the short. The brokerage _has_ to let you cover the short position, so this should work.

I would call the brokerage ahead of time to confirm that they will let you do this. Just make sure that you don't give any indication that you're trying the gambit. Just ask them, if you have a short position in a stock in one account and you believe that you can buy it back more cheaply on the other exchange, will they let you do the purchase on the other exchange and journal the shares over to cover the short? Make no mention of currency conversions or anything -- pretend that you're actually interested in shorting stock.

In order to short stock you need a margin account, but if you're regularly converting $10K USD I don't think that you'll have much trouble getting it.

Edit:

I really should read the whole thread before replying. This was just a more long-winded way of saying what the previous posters have already said...


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## humble_pie (Jun 7, 2009)

it's more difficult than what mikeT says. Unless done in 2 entirely different & separate accounts, both the short & the long positions will run concurrently for 3 days until settlement occurs, and that is precisely what compliance will cancel because it violates the don't-short-the-box rules. This is what the scotia itrade rep was trying to explain to the OP.

in some cases, on a random haphazard basis, these attempts have worked because 1) compliance failed to notice, or 2) a poorly-trained representative journalled a long covering position to a short account before settlement date & compliance failed to notice.

the old cluster of messages about norbert's gambit - from around 2005 - have examples like this, but i'd say those messages are out of date & obsolete because brokerages have wised up. Especially with the calls i hear they're getting these days about gambit strategies.


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## humble_pie (Jun 7, 2009)

rysto won't work for the same reason as i set forth a few minutes ago. Your plan will trigger a 3-day period in which both long & short positions will run concurrently in same account. There are rules against this. Every broker will respect them.

such an attempt might slip through the cracks initially but the risk looms that compliance will cancel one side or the other of the gambit with no notice whatsoever ... leaving the client short with no cover ... or long a stock he didn't want with no hedge ...


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## Rysto (Nov 22, 2010)

humble_pie said:


> Your plan will trigger a 3-day period in which both long & short positions will run concurrently in same account. There are rules against this. Every broker will respect them.


There are no rules against this. There are rules about selling short when you already hold a long position. There are no rules against buying while you are in a short position. There *can't* be rules against it; you have to be able to buy long when you are short in order to be able to cover the short.


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## osc (Oct 17, 2009)

Open an IB trading account and exchange on FX.


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## MikeT (Feb 16, 2010)

Humble pie, sorry, but you are completely wrong.

You are ALWAYS allowed to cover a short position. Same day is fine.. As long as the short position is established first, even by a few seconds.

The rules you're talking about are if you go long first, then short.


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## humble_pie (Jun 7, 2009)

_" ... There are no rules against buying while you are in a short position. There can't be rules against it; you have to be able to buy long when you are short in order to be able to cover the short. "_

yup i'd wondered if some noob would come back with that notion. What i didn't anticipate is that the noob would be so belligerent about it. Let alone a noob who'd brag about lying to his broker lol.

of course one can cover a short at any time, even one second after putting on the short position. Covering a short means buying stock to cover in the short account which by definition means buying with the same currency. This is not what a gambit strategy seeks to accomplish. It seeks to cross the gulf into the opposite currency without FX fees. There are only a couple of frail, frayed rope bridges across that chasm & our friend has not got hold of either one.

cross-holding concurrent long & short positions in different currency satellites of the same account does indeed violate the rules & will indeed attract compliance. Read the rules. Ask your broker. Assuming they're willing to speak to you, after the conspicuously dishonest conduct towards brokers that you've advocated upthread.

as i've posted elsewhere, an online trading platform built on the ADP mainframe system (bmo, possibly roybank) is more amenable to gambitting than one built upon the ISM system (tdw.) And sometimes it happens that trading representatives and compliance departments are far less vigilant than they should be.

addendum to Mike the T: i hadn't realized that you are also a noob, at least with respect to shorting ...


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## MikeT (Feb 16, 2010)

Are you saying its illegal? Or it will just attract some attention?

Can you post the law? Or a link to it? Because I can't seem to find it. 

The shorting against the box laws just create a taxable event, which wouldn't matter if you didn't have any appreciation of the stock price. They also have a law prohibiting you from using the off-setting positions as margin .. which wouldn't matter either for the purposes of a gambit. So I don't know which law you're referring to.


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## timothius (Jun 7, 2010)

MikeT said:


> Xetrade is likely cheaper, at least it was a few years back.


Thanks for your replies all! Ok, so first in regards to the FX companies, I thought XETrade *was* cheaper which was why I went through the trouble of setting one of those accounts up a year ago. However, I"ve only used them like once because their rate still includes at least a 1.5% fee.



slacker said:


> For that amount of money, Interactive Brokers is probably the best bet. They charge 0.2% for that amount of money.


I'm rather intrigued about Interactive Brokers? So for example, if the USD == CAD (as according to this) and I want to move 10K from USD to CAD, my total bill for the transaction would be $10,020 USD? I want to be sure that that is the consistent rate that it charges and that it actually uses the ACTUAL rate not a rate that includes their spread like XETrade.


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## timothius (Jun 7, 2010)

Now in regards to cross trading in the stock market to eliminate the spread entirely (minus trading fees), I have a few questions.

Obviously my situation is iTrade specific. I currently only have USD and CAD cash accounts. I may open up a margin account soon to allow shorting if I can figure out what the rules are and what's generally accepted. It doesn't seem like there's much of a consensus here, which is odd.

Here's what I'm thinking:

Those who are advocating to short the box are recommending it soley to "freeze" the price of the stock you will be journaling over. This minimizes any risk due to market fluctuation. This does seem like a pretty good idea. Shorting the box, according to my research does not appear to be illegal and I would think is allowed by brokers, but it won't shelter your capital gains (if applicable). If this is done, it pretty much doesn't matter what interlisted stock gets purchased/sold as the price has no effect. I'm not sure why online brokerages would have any rules against it either since they still make their money on commissions.

So in summary this seems to be the simplest way of getting this thing done pretty much risk-free.


Buy any high-volume interlisted stock on the NYSE.
Seconds later, short the same stock in your margin account.
Wait at least 3 days for the trades to settle.
Phone in to have the shares journaled over.
Wait 1 more business day. (takes that long to have them journaled)
Close the short position.
Seconds later, sell the interlisted stock on the TSE.
*Did I miss something?*


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## MikeT (Feb 16, 2010)

Couple things,

1. Short the stock on the tsx first.
2. Buy the same number of shares on the NYSE second.
3. Call in and have them journal your bought shares over and have them use them to cover your short.

In your example 2 and 7 are the same thing. You don't need to sell the stock twice. Also shorting first avoids the "shorting the stock you already own" problem (at least I thought it did).

Now humble says this is illegal or against some rules. I've been reading through the laws and can't find mention of anything other than what I've mentioned above. Maybe he can post the rule he's referring to and then we can settle this whole thing.

The other option is to buy some put options to cover your shares for the three days then sell everything after the settlement date. A little more costly, but probably less controversial. Or you could forgo the options and just take the risk for a couple days.

And the last option is just to pay the cheapest conversion fee you can find. Depending on the amount of money, this might be cheaper anyways.


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## humble_pie (Jun 7, 2009)

the speed with which mistersolicitor T has read the universe of laws is awesome. In reality no one said anything about lawful, unlawful, legal, illegal except the legal beagle himself.

beagleT, have you ever actually accomplished a real gambit. Or are you just blustering a theoretical approach. 

if it's theory only, surely now is the time to try the real thing 

gambit should be done with 2 online orders. Gambitters need to avoid telephone wait times + haphazard risk of refusal by representatives + higher agent commish.

journalling has to be completed. The catchy part is representatives who may - and do - refuse to journal. For the reasons already reviewed. Please do keep in mind that cross-currency journalling outside a short account is a voluntary service which a broker can offer at their discretion. Or not.

as i've mentioned, some brokers' trading platforms are easier to gambit.

good luck. US markets are open tomorrow. Let us know how you fare.


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## Rysto (Nov 22, 2010)

humble_pie said:


> Let alone a noob who'd brag about lying to his broker lol.


It's none of the broker's business _why_ I want to make a particular transaction.


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## MikeT (Feb 16, 2010)

Nice way to change your story there to distract people. Then distract people further by calling me names.

First you say it's shorting the box, now it's a problem with getting your broker to journal stock over?

Which one is it?

According to the tsx they are "fully fungible" which I had to look up. Maybe you should too.
http://www.tmx.com/en/pdf/TSX_QuickReferenceGuide.pdf


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## OhGreatGuru (May 24, 2009)

_With my work I get paid in USD every month from multiple sources. I move it through my RBC USD personal account and transfer it to my online brokerage account @ Scotia iTrade.

The amounts I'm dealing with are upwards of $10,000 USD/month.

What I'm asking is the best way to convert the USD to CAD each month to pay bills and such. Also any ideas on what I should do with the money to passiblely earn a little more coin is much appreciated!._

1. Tell your clients you want to paid in real money?

2. Buy besteller books in the US with the $US, and sell them on the internet at the CDN price?

3. Find out a way to claim the exchange rate as a business expense?

4. Drive as far south as you can, collect your money in US dollars, then buy CDN dollars at a financial instiution that is selling CDN dollars at a discount
because it is cheaper than shipping it to a commercial currency exchange; then drive home. Of course the RCMP may come knocking on your door about all the cash you are bringing across the border.


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## timothius (Jun 7, 2010)

Hey thanks for your out-of-the box post, OhGreatGuru.



OhGreatGuru said:


> 1. Tell your clients you want to paid in real money?


#1 is not possible unfortunately.



OhGreatGuru said:


> 2. Buy besteller books in the US with the $US, and sell them on the internet at the CDN price?


#2 is similar to a similar strategy I will use when setting up my own retail business later this year. I will be purchasing inventory from the US and will therefore get to efficiently use my USD.



OhGreatGuru said:


> 3. Find out a way to claim the exchange rate as a business expense?


#3 I already do (after talking with the CRA). It really adds up.



OhGreatGuru said:


> 4. Drive as far south as you can, collect your money in US dollars, then buy CDN dollars at a financial instiution that is selling CDN dollars at a discount
> because it is cheaper than shipping it to a commercial currency exchange; then drive home. Of course the RCMP may come knocking on your door about all the cash you are bringing across the border.


#4 I haven't heard of no. 4 before but I personally have no clue as to go about doing that. Also, it really wouldn't be cost effective.


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## humble_pie (Jun 7, 2009)

mike you are trying to make a complex strategy sound simple and you are misleading readers here. Is it because you want to come across as the heavyweight expert even though you lack the relevant knowledge.

the short answer: try a real gambit. 

the long answer: broker representatives sometimes hesitate or refuse to cooperate in a gambit "for the reasons already reviewed," as i wrote. These are the rules against shorting the box, as i wrote. These are rules upheld by iiroc & by the canadian association of securities traders & by their US counterparts, following amendments to both the US & canadian income tax acts. Every broker respects these rules.

there are detailed posts here in cmf forum from parties whose online brokers refused to journal their shares in a gambit manoeuvre. These parties were invariably highly distressed. There are posts in other forums, over the past several years, from persons who were similarly refused.

the gray or obscure zone, which makes it difficult for the broker, looks like this. Covering a short position means buying the same security in the same currency in a short account to cover the short. It does not mean buying long in a different currency in a different sub-account.

what this latter action does is open two positions, one long, one short, that will run concurrently for at least 3 days until settlement date, and possibly an additional day for journalling. During these 3 or 4 days the umbrella account will be short the box. It doesn't matter if the investor shorted first by a few seconds or not. The short box formation, if noticed, could possibly be removed by a compliance department. The non-complying pretzel structure could even be brought to compliance' attention at the very moment when the investor client asks a hesitating representative to do the journal, and the representative in turn then asks compliance for guidance.

what matters here is not what lawyers might argue over the wording of the rules. All that matters is the ooncrete action that a representative and/or his compliance department decides to take.

mike you may not understand any of this, but other people will understand.

interestingly, there remain a number of workarounds for this problem. Workarounds that may be difficult to figure out, but they can be figured out.

for the nth time, may i mention that it's helpful to begin with a basic knowledge of how different brokers' trading platforms are configured.


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## humble_pie (Jun 7, 2009)

# 5

make friends on first nation reserves that straddle or are located near the border.


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## Rysto (Nov 22, 2010)

humble_pie said:


> These are rules upheld by iiroc & by the canadian association of securities traders & by their US counterparts, following amendments to both the US & canadian income tax acts.


Can you kindly point us at these rules.

And by the way, it definitely is *not* against the US income tax act to short against the box. It just generates a taxable event.

Edit: And really, it doesn't make any sense for the Canadian income tax act to say _anything_ about shorting against the box. Shorting against the box was a strategy in the US to turn a short-term capital gain into a long-term capital gain tax-wise, and take advantage of the favourable tax rates afforded to long-term capital gains while locking in the gain before the one year period expired. Canada has no concept of short- and long-term capital gains, so why would the income tax act have anything to say about shorting against the box?


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## timothius (Jun 7, 2010)

*UPDATE #1*

I called Scotia iTrade and the agent I talked to said that I couldn't short a stock that I own, which has me a little ticked. I understand that *wash trades* are illegal and I suppose this could be viewed as a wash trade possibly, since I would sort of being buying and selling to myself? It's also possible that it's the order that causes the issue. That is, I can't own a stock that I already own, but I can short a stock and THEN buy it??? I'm not sure anymore...

To be honest, I still haven't heard it explained or even stated (with reasons) WHY shorting the box is illegal. After all, the customer can't avoid taxes with this strategy anymore (unless certain conditions are met), the broker makes money with commissions, and the buyer benefits as well. *See this article by Wikipedia*. Not only does it not say it's not illegal, it doesn't say it's against the rules either. I'm just confused and really am curious about this. One legit reason to short against the box is some big stock news comes out and you know the stock will move in a big way, but you don't know which way. To hedge your bets, you could short against the box. Of course, my usage of it is also an honourable one as well. 

One positive thing I heard from iTrade is that I can ask them to do a intraday trade when journaling the shares over. So unfortunately without shorting (and therefore with significant market risk) the picture would look like this:

1. Buy any high-volume interlisted stock on the NYSE.
2. Wait at least 3 days for the trades to settle. (3 days of market exposure/risk)
3. Phone in to have the shares journaled and sold on the TSX with an intraday trade.

_I'm going to give this a go within a few days._

*UDPATE #2*
I also called Interactive Brokers and they said that indeed their conversion rates are indeed ridiculously low as advertised. However, the agent said that if that was all the account was used for, it would quickly attract compliance and (I'm guessing) would probably be shut down. Therefore if I went with them I would have to keep a substantial part of my portfolio with them to keep them happy. They also don't allow RRSP or TFSA accounts so that's too bad.


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## timothius (Jun 7, 2010)

humble_pie said:


> # 5
> 
> make friends on first nation reserves that straddle or are located near the border.


Hehe. Um, yeah. 

As it pertains to Scotia iTrade (not TD Bank), how would YOU best perform this strategy humble_pie? What is the 100% compliant, by-the-rules way to trade interlisted stocks (with little or no market exposure) to convert USD to CAD??? Oh yeah, and please use bullet-point form...

I'd really appreciate it, and so would the others that read this!


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## humble_pie (Jun 7, 2009)

of course it's in US acts. The taxpayer relief act of 1997 for one. No shorting the box.

ratso may i ask a curious question. Were you seriously wanting to gambit currencies at beneficial wholesale rates. Now this is a challenging project. It takes skill to gambit successfully 

if that's what you wish to do, why don't you work constructively at solving the problem. You know, like other members of cmf forum work constructively at solving their problems.

or do you just come here to pick fights.


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## Rysto (Nov 22, 2010)

Really, now. Name calling?



humble_pie said:


> of course it's in US acts. The taxpayer relief act of 1997 for one. No shorting the box.


Wrong. Completely wrong.



> Prior to the enactment of the Taxpayer Relief Act of 1997 (TRA '97), a taxpayer could hedge against volatility in the value of stock by completing a "short sale against the box," which had no tax consequences until the taxpayer closed the position by returning borrowed shares to the lender. The TRA '97 curtailed use of this technique by deeming the short sale a constructive sale on which gain or loss must be immediately recognized (whether or not the position is sold).



And as it happens, just on Friday I did the gambit in my RRSP at TDW(not through a short sale, obviously).  Saved myself $300.


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## humble_pie (Jun 7, 2009)

right. Completely right.

TRA97 "curtailed" shorting against the box, exactly as your quote proves. Why would you be shooting yourself in the foot, now.

re your rrsp everyone knows that the tdw rrsp trading platform can execute a gambit perfectly. This is not news.

i mentioned the rrsp aspect upthread. Others have discussed tdw rrsp gambits in other threads on cmf.

i for one happen to have difficulty believing your rrsp story at this late date, though. Especially since you're on record upthread as the guy who advocates lying lol. Why didn't you boast about your rrsp "success" days ago, if it were true.

but we'll let your claim pass, because the topic of this thread is not rrsp gambits, but the far more challenging non-registered gambits in cash & margin accounts.

you've already read how the OP has been refused pointblank by scotia itrade.

tomorrow, when US markets open, why don't you take your margin account gambit fight straight to the heart of td waterhouse itself. I'd love to hear what they have to say to you.


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## MikeT (Feb 16, 2010)

Humble, give it up. That quote proved you wrong. That quote says it creates a constructive sale. Meaning you can't use a short sale to delay a taxable gain. Shorting the box IS NOT ILLEGAL. 

The reason it is in us tax law is because they have different short and long term capital gains rates. People used to make a short term gain in a stock, then sell it short and hold both positions for a year before selling the long position. Thus making the gain a long term holding, lowering their taxes.

The act quoted didn't make it illegal, it just made the act of selling short in that situation count as a sale of your long position, making you pay tax on your short term capital gain. 

You're starting to sound ridiculous.

Now if you want to argue it's a wash trade, different argument.


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## humble_pie (Jun 7, 2009)

i didn't quote anything.

rytzo quoted.
his quote was ridiculous.

mike i have no interest in your posturing & i'm not going to read much less reply to the drivel & trash you keep posting here.

please take your fight to your broker tomorrow & get a gambit done in your short & margin accounts as easily as you claim it can be done. If they refuse, you can spin your nonsense with them.

i'll repeat: gambits are difficult to execute. They are the thin rope bridge across the currency chasm. Over several years, i've been enormously helped by senior brokers at 2 different firms. In my opinion, you have not even begun to figure out the strategy.


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## MikeT (Feb 16, 2010)

Quite funny. When you are losing an argument, you resort to name calling and words like trash and drivel. Meanwhile, we've been tearing apart your argument based on facts, law and rational conjecture.

You respond with more disrespect. How old are you? Perhaps your young age has something to do with the level of respect you show.


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## timothius (Jun 7, 2010)

Running errands today. Wasn't able to execute the trade before the market closed.


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## marina628 (Dec 14, 2010)

I posted something similar to this last week and I had no clue what a gamblit was then.I did some reading then I called tdwaterhouse ,I had to open 2 accounts to do what I wanted to do ,one USD and other in CAD.
My bank sent a bank draft for $50,000USD to TD Waterhouse which was credited in my account and available for me to see online 24 hours later.
I made my purchase of stock and 24 hours had it sold 'via journal entry'into CAD.I was honestly so stupid on the phone because i was not 100% sure what i want to do lol.Finally I just said to the broker please do it so I don't lose on exchange.Total time it took me to do this was 5 business days ,I got roughly $380 more in the trading account than i would have gotten to do straight transfer from one account to another.Honestly for myself the stress etc I am going to pay my 1.5% to the bank for peace of mind.Plus side is I maxed my RSP contribution room by taking a $100,000 from my company.The other $50,000 is going down on my mortgage which is 3.69%.I will let the accountant figure out what I report on my T4 as I have a shareholder Loan to business for more than the $100,000.It was an experience and can tick that off my list of things to do lol.


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## larry81 (Nov 22, 2010)

marina628 said:


> Plus side is I maxed my RSP contribution room by taking a $100,000 from my company.The other $50,000 is going down on my mortgage which is 3.69%.I will let the accountant figure out what I report on my T4 as I have a shareholder Loan to business for more than the $100,000.It was an experience and can tick that off my list of things to do lol.


I dont know your specific situation but i strongly suggest that you validate with your tax accountant if transferring 100k from your company to you was really the best thing to do ...

Purely from a tax perspective, it make much more sense to actually invest the money directly within the company, or transfer it to another holding company with dividends sorely for investment purpose.


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## marina628 (Dec 14, 2010)

I had a shareholder contribution of $260,000 in 2007 that i can take back tax free as i invested after tax cash in my business.Accountant approved it .


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## humble_pie (Jun 7, 2009)

lol what a gong show.

it's hard to figure out what's going on there, but was that supposed to be a tdw rrsp gambit.

avrex showed how this should be done 100% online. instantly. painlessly. bing. bang.

heed his message.

http://www.canadianmoneyforum.com/showthread.php?p=43187&highlight=avrex+rrsp+gambit#post43187


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## marina628 (Dec 14, 2010)

You guys make everything seem so easy when in reality for many of us it is not.Yes it was RRSP and there are a million things to read online ,after reading that thread it looked easy ,maybe another time I will try this online.For now I am good as I maxed my rsp.
I have converted enough accounts receivable to CAD effective FEB1 to cover our monthly expenses and my clients will be paying the exchange not me in future


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## timothius (Jun 7, 2010)

Ok, it's getting a little off topic here. Here's my final post on this matter.

So I think for most people avoiding the 1.5%+ fees will be a good deal when you buy the shares of an interlisted company on the NYSE, then have the shares journaled over to your CAD accound then sell them there. Yes, you can get burned by the market, but if you pick a good stock and don't necessarily need the money right away you can even make some money on the transaction besides the 150 basis points you saved. Depending on the rep, you may even be able to get the shares journaled and sold intraday to limit risk. Shorting the stock doesn't seem to be all that viable.

Still, it really sucks that the CAD is so flippin' high. Oh for the days of a 70-80 cent dollar. I'd be a millionaire in just a few years... 

Thanks for all the help guys.


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## Jackson (Jan 19, 2011)

It would like to chime in with a slight modification to the OP of this thread and discuss what is essentially shorting against the box whilst adding my basic knowledge of the process.

From what Ive been told shorting against the box is deemed legal for US accounts and Canadian account yet every broker i have spoken to doesn't allow it  WHy is this so? A clear explanation would be greatly appreciated. 

How about going short and long the same stock in the same account whether it be on the NYSE or the TSX, would this be possible if my brokers platform allowed it to occur?


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## humble_pie (Jun 7, 2009)

some of the messages & suggestions about gambitting in this thread are quite distorted & misleading to a general investor, let alone a novice investor.

some - but not all - rrsp messages are fine. As i've mentioned upthread together with its link, avrex has posted a perfect strategy model for online gambitting in tdw rrsp that anyone can follow. There is a confused rrsp post upthread that should be ignored, however.

gambitting in non-registered accounts at tdw & some other brokers is another story. This is impossible to carry out unless the client knows how. No one on this forum has come even remotely close to understanding the steps that have to be undertaken.

and tdw doesn't really want the steps to be known, either, because the practices are, very roughly speaking, more or less confined to, and available to, the high value clients only.

this is why some gambit attempts get rejected or stranded like beached whales. The less experienced representatives who deal with the general investors may legitimately misdirect them or even refuse them, in the way that the OP on this thread was misdirected by scotia itrade into believing that 3 days must elapse before an open gambit position can be closed.

meanwhile, back at the big green, the elite representatives who usually work with arbitrage clients - and it's the arbitrage clients who are the currency gambit clients - also have a mandate to accept or reject trading instructions. This entire field is a gray zone. When it comes down to details like deciding whether to offer a high value client a web commish or an agent's higher manual trade commish, the decision can turn on whether an agent is feeling gracious or grouchy that moment, or even whether he likes or dislikes the client ...

upthread i set forth some of the reasons why the general representatives may legitimately refuse to handle a gambit. Also reasons why an online trading platform may reject at least one side of a gambit pair of orders. And also reasons why a compliance department can rightfully cancel an entire gambit strategy at any moment. A well-known troll and his sidekick promptly leaped out of the woodwork with silly arguments. Apparently they'd never heard of compliance departments.

a useful clue is timothius' discovery that getting the job done can depend upon the individual representative. This is true. As mentioned, it's all a grey zone. That's why approaching agents dishonestly or aggressively is never going to cut the biscuit. Both parties - broker & client - need a positive & cooperative relationship.

another clue is something i've posted repeatedly. Some trading platforms are more accommodating than others. Platforms built on ADP systems tend to be more accommodating, for example.

my suggestion is learn to gambit only if 1) you're the kind of person who enjoys solving complex puzzles, and 2) you're an unemotional, detached kind of trader. Other parties will probably be less stressed if they simply pay the FX fee.


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## Jackson (Jan 19, 2011)

Since my 1st post teh other day i have made some calls and done some research.

1) Of the 5 brokers I spoke to (US based and Canadian) none has a platform that allows going long and short the same stock in the one account whether it be on the NYSE or the TX.

2) There is no rule stating that this is illegal, yet no explanation as to why they won't allow it.

If anyone can respond with some insight would be much appreciated.


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## humble_pie (Jun 7, 2009)

this is one of those karmic riddles where the more you push to know, the less likely it is that the knowledge will find its way to you.

try an eastern approach.
focus on something else.
purify the spirit.
namaste.


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## Jackson (Jan 19, 2011)

Not quite the insight I was after humble, insight nevertheless


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