# Best way to convert cad to usd?



## Johnnydd (Nov 13, 2015)

What is the best way to convert 20k to 30k cad to usd? And how.


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## nwmea (Sep 10, 2015)

Are you asking about a tool to convert it, if not, i guess you should rephrase your question with bit more information?


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## zylon (Oct 27, 2010)

Johnnydd said:


> What is the best way to convert 20k to 30k cad to usd? And how.


http://canadianmoneyforum.com/gtsea...rum.com/login.php?do=login&ss=6752j6888542j15

I've tried it, but did not succeed.
Others say it works like a charm.


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## Johnnydd (Nov 13, 2015)

no i mean where can i get the best rate. Going to the bank and converting seems like a huge loss.


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## Kim (Jan 10, 2011)

Ugh diving into more questions...

Well then yes let's rephrase the question to say " a tool to convert ", what are the options if any.

I checked out the link above and got the impression this ( NG ) is for use only though an RRSP.

And I am guessing OP was referring to cash that is currently sitting in a personal or business chequing acct.


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## humble_pie (Jun 7, 2009)

basically there are only 2 choices:

1) find a low-cost currency exchange house. Some on here have been pleased with Knightsbridge. There's an enterprising owner & this toronto-based firm specializes in USD exchanges.

2) or else learn to gambit your currencies yourself. A gambit is an arbitrage trade. The link above is not helpful. You would have to start from scratch, google gambit trading, google norbert's gambit, both in this forum & throughout the web.

if you gambit, the technical how-to details will depend on your broker, will depend on what sort of mainframe supports their platform.

PS currency gambit trades succeed in both registered & non-registered accounts. The greater part of the art consists in understanding how your broker trading platform works.


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## Kim (Jan 10, 2011)

perfect! thank you HP.


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## james4beach (Nov 15, 2012)

Yes what humble_pie said. It's not just for RRSPs. I routinely convert USD/CAD in my non-registered account, and the gambit method is extremely useful.

To give you a sense of its efficiency: when converting 30k, your net fees will be approximately 0.08%. That's basically a foreign exchange fee of 0.08% versus standard bank fees of 1.5% to 3.0%


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## humble_pie (Jun 7, 2009)

^^

who's your broker, Kim? i'll try to show you how-to-gambit if you'll update us about your amazing horses. That lovely colt - Vertical Challenge wasn't he - must be a tall, dark & handsome middle-aged movie star by now.


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## vi123 (Oct 29, 2015)

james4beach said:


> Yes what humble_pie said. It's not just for RRSPs. I routinely convert USD/CAD in my non-registered account, and the gambit method is extremely useful.
> 
> To give you a sense of its efficiency: when converting 30k, your net fees will be approximately 0.08%. That's basically a foreign exchange fee of 0.08% versus standard bank fees of 1.5% to 3.0%


Run the numbers here: http://norbertsgambit.com


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## james4beach (Nov 15, 2012)

That calculator only focuses on the DLR method, which is only one way (and probably not the most efficient way for large amounts). I stopped using DLR.

It's easy to calculate the net fees for the typical gambit. The fees are pretty much just $10 fee + $15 fee on the US side = $25 fees in total

For 50K, your fees are $25 and as a percent it's 25/50000 = 0.05%
For 5K, your fees are $25 or as a percent 25/5000 = 0.50%


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## Jaberwock (Aug 22, 2012)

Johnnydd said:


> What is the best way to convert 20k to 30k cad to usd? And how.


Open a USD account at your bank, open an account with Interactive brokers, transfer the CAD to the IB account, trade it for USD on the forex exchange, cost $2.50. Transfer it back to the USD account at the bank.

More trouble than its worth if you are only doing it once, but you will save a lot of fees if you regularly need to exchange CAD and USD


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## james4beach (Nov 15, 2012)

Jaberwock said:


> Open a USD account at your bank, open an account with Interactive brokers, transfer the CAD to the IB account, trade it for USD on the forex exchange, cost $2.50. Transfer it back to the USD account at the bank.


IB is great for currency exchanges, but there are other fees involved: 10 USD/month just for the account to sit there.


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## RBull (Jan 20, 2013)

Kim and Johnnydd,

go here to learn norberts gambit with specific details/instructions for different financial institutions. 

https://www.pwlcapital.com/en/Advisor/Toronto/Toronto-Team/White-Papers


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## Kim (Jan 10, 2011)

humble_pie said:


> ^^
> 
> who's your broker, Kim? i'll try to show you how-to-gambit if you'll update us about your amazing horses. That lovely colt - Vertical Challenge wasn't he - must be a tall, dark & handsome middle-aged movie star by now.


I have an account with Qtrade and currently hold both American and Canadian stocks. 

Quite the memory you have Humble! Yes that colt grew up to be very tall and is now an English Hunter - classic dark bay. Another lady owns him now but I hear about his progress from time to time.


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## humble_pie (Jun 7, 2009)

RBull said:


> Kim and Johnnydd,
> 
> go here to learn norberts gambit with specific details/instructions for different financial institutions.
> 
> https://www.pwlcapital.com/en/Advisor/Toronto/Toronto-Team/White-Papers



the above-referenced PWL papers only cover the big 5 bank brokers - cibc, td, scotia, bmo & ry.

there's no mention of questrade - their mainframe is custom-built, so it's quirky to gambit on - & certainly no mention of Qtrade, where Kim says she's a client.

i can say for a certain fact that PWL's paper on TD gambits is hopelessly out of date.

also, is PWL advocating use of the DLRs for all currency arbitrage trades at all brokers? they're not specifying that only DLR.U is pegged, therefore parties arbing from USD to CAD via the DLRs - ie going from DLR.U to DLR - are exposed to several days of currency fluctuation? tch tch

the DLRs are an ETF cross-currency crutch that was invented by ETF vendor horizons betaPro at a time when TD was being particularly recalcitrant about instant gambit sells & instant gambit journalling. Because DLR.U is pegged, parties arbing CAD to USD can take their own sweet time over getting the journal accomplished. However, the reverse is not true.

what it boils down to is that currency arbitrageurs can begin with DLR-->DLR.U if they need a crutch; but as soon as they are able they should progress onwards to using a highly liquid interlisted canadian common stock. A very popular carrier stock is royal bank. Other stable highly liquid interlisteds such as TD, BMO & MFC are also good gambit candidates.

there are a number of other guidelines for using common stocks as gambit carriers, but i won't get into these at the moment. The key issue at the moment is How best could Kim gambit currencies at her particular broker, which is Qtrade?


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## humble_pie (Jun 7, 2009)

Kim said:


> Yes that colt grew up to be very tall and is now an English Hunter - classic dark bay. Another lady owns him now but I hear about his progress from time to time.



lucky lady. He was such a breathtaking dream colt & he was growing into a magnificent horse when you used to post his photographs.

re Qtrade, i don't recall any reliable person posting here about how-to-gambit at Qtrade. Everything depends, first on their mainframe system, next on how their trading platform is built.

here's a suggestion, in the event that no other Qtrade client responds with a practical how-to. Contact a favourite Qtrade licensed rep or manager. Ask what will work on their system. The chances are high that Qtrade clients will have to phone to do the sell side order, ie clients will not be able to execute instant onlinle gambit sell orders on Qtrade the way they can at BMO or roybank brokers.

as we all know, some brokers are opposing gambit trades energetically. If you run into a strong negative, it may be coming from that one representative only, so it would be worth trying again on a later day with another contact.


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## tkirk62 (Jul 1, 2015)

I've used Zenbanx and found it easy to use and a fair price.


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## humble_pie (Jun 7, 2009)

^^

wondering what FX fee zenbanx actually did charge you? you'd have to compare with the spot rate as close to the moment of your exchange as you can get. Most persons would use bank of canada noon rate on that day or XE dot com records for that day.

i imagine it's likely that zenbanx could have charged you the regular 1-2% fee (on top of the spot exchange rate) that all financial institutions are charging.

2 methods - each with medium difficulty, neither is grade one easy - of avoiding these high institutional FX fees are 1) arbitraging currencies as is frequently discussed on cmf forum, or 2) trading forex at Interactive Brokers, as one party in this thread correctly suggests. Arbs & forex traders obtain close to spot rates.


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## Jaberwock (Aug 22, 2012)

james4beach said:


> IB is great for currency exchanges, but there are other fees involved: 10 USD/month just for the account to sit there.


 Yes, it does not work for everyone. I also use IB for trading in the US, so it works well for me.

Another person I know does a lot of export sales and converts a lot of US to CAD using IB, so it works for him.

If you are only doing one or two transactions a year, try Canadian Forex. They charge only 0.5% on the spread, and you can transfer electronically from some of the major banks in Canada. I used them a couple of years ago to transfer money overseas, and they were excellent, much cheaper than my bank.


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## Kim (Jan 10, 2011)

OK soo....

I looked at Knightsbridge and from reading their website info it looks like they will exchange your money and pay your USD invoice at a competitive rate. Which really isn't what I am after. I am looking to hold more USD either in cash or in US equities.

I wasn't able to find online the main frame system that Qtrade uses, would it seem odd if I phoned up and asked? Would they be wary if I phoned up and asked if they would allow me to execute instant online gambit sell orders? I don't feel that I know enough yet to actually go through with a gambit.

I did take a snapshot of what Qtrade looks like...not sure if that is of any use.









I bank at TD and currently have a USD account ( no monthly fee ) which holds a few thousand dollars. I phoned the bank and asked them what they could do for me and they said they would charge 1.45% plus the exchange difference ( obviously ) to open a Canadian Money Market account, into which we would deposit a six figure amount to then transfer over to the USD account. This would also involve having to sign papers.

I should mention I run everything through our business.

NOTE: I am sitting here laughing at myself - every time I ask a question I have 10 more behind it. When your as old as I am trying to catch up on a subject you have ignored for too long it seems embarrassing and daunting.


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## gardner (Feb 13, 2014)

humble_pie said:


> the DLRs are an ETF cross-currency crutch that was invented by ETF vendor horizons betaPro at a time when TD was being particularly recalcitrant about instant gambit sells & instant gambit journalling. Because DLR.U is pegged, parties arbing CAD to USD can take their own sweet time over getting the journal accomplished. However, the reverse is not true.


This sums up a point that I think is missed a lot of the time in discussions about the suitability of different trading platforms for Gambit execution. If you need INSTANT execution, then certain systems are better than others. If you are willing to wait for conventional settling and journaling times -- three days maybe -- then you can do a gambit on any old platform that allows journaling of DLR -- probably all of them.



> However, the reverse is not true.


I am a little puzzled by this. In the CAD-->US direction your rate is locked in the moment your buy of DLR executes.
In the US-->CA direction, the rate is locked in the moment your sell of DLR executes.
Both of these are singular moments that you fully control the timing of. At all other times you either hold the currency itself or DLR, which is pegged to $US. Provided you are able to be patient and see the cash locked up for a few days, I don't see a difference in either direction.


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## james4beach (Nov 15, 2012)

gardner: I agree. DLR can be used in both directions. I used to convert USD to CAD with it.

As you point out, you decide when to sell the shares and therefore you still have control of the currency conversion point.


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## humble_pie (Jun 7, 2009)

gardner said:


> In the CAD-->US direction your rate is locked in the moment your buy of DLR executes.


this is true, because only DLR.U is pegged. Once a gambit trader has captured DLR, he has stabilized the exchange rate that will apply using pegged DLR.U.




> In the US-->CA direction, the rate is locked in the moment your sell of DLR executes.


but we are talking only about the many broker operations that do *not* permit instant online selling of DLR when DLR.U has just been bought (keep in mind we're referring to traders moving from USD to CAD here.)

the delaying brokers (all except BMO & royal bank) do not have web platforms that permit instant online gambit selling. Clients of these brokers have to deal with the vagaries of the licensed representatives, who might charge a full commission to sell, or a web commission to sell, or in some cases (Virtual Brokers) the reps will refuse the sell order entirely.

faced with a T+3 trade delay, the client moving from USD to CAD can indeed commence by buying DLR.U, but his position in DLR.U is going to fluctuate for the next 3 days, in line with fluctuation of the currency itself.

it's true that this client can phone his broker to request that DLR be immediately sold & DLR.U be journalled, etc. But if he is going to have to go to that trouble - plus deal with the vagaries of the broker - why wouldn't this client use a liquid carrier stock such as RY or TD? this will avoid paying horizons betaPro the spread on their DLRs & this client will likely obtain a slightly better FX rate on his arbitraged transaction.




> ... you either hold the currency itself or DLR, which is pegged to $US


oh i am so sorry! but this is not accurate! it's only DLR.U that is pegged to USD. DLR is not pegged to anything.


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## humble_pie (Jun 7, 2009)

james4beach said:


> gardner: I agree. DLR can be used in both directions. I used to convert USD to CAD with it.
> 
> As you point out, you decide when to sell the shares and therefore you still have control of the currency conversion point.



agree with what, though? personally i find gardner to be a wee bit confused re the DLRs, ie he's not clear over what's pegged & what's not pegged.

& here's where you seem to be just a tad wooly yourself james! when you say that the gambit trader "decides when to sell the [DLR.U] shares" so therefore he still controls the currency conversion point.

this is only true for the gambit trader who is regarding his DLR.U holding as a proxy for the US currency itself. Which it is, in a way, except that the trader who buys up an inventory of DLR.U is paying a clear price for this, ie he's paying commission plus horizons betaPro spread plus ongoing horizons betaPro management fee, all for the privilege of holding his US currency in this exotic alternate format.

meanwhile, in CAD, his DLR.U holding is fluctuating up & down.

in reality, most gambit traders are intent on realizing the opposite currency as soon as possible. They make a currency trading decision to convert or they have an urgent need for a quantity of the opposite currency, so they want to carry out the entire operation as fast as possible. Gaining the opposite currency instantly is the gold standard of the gambit operation.

it's true we occasionally notice a few investors who store quantities of USD in DLR.U as if DLR.U were a piggy bank. Then they convert a small portion into CAD now & then. What these folks don't seem to realize is that they're paying fairly high costs - as outlined above - to rent the DLR.U piggy bank.


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## james4beach (Nov 15, 2012)

I've been a bit hazy all day, sorry. Correcting dividend misconceptions last night wore me out a bit!

What I meant is that if you are starting with USD, when you buy DLR.U this is a null operation. You still hold USD. Nothing has been converted yet and holding DLR.U is indistinguishable from holding the USD cash except as you point out, the fees are reducing the piggy bank.

The conversion takes place when, eventually, you sell the DLR side. You have control and discretion as to when you make the sale and realize the conversion. However as you accurately point out, you are trapped holding that USD for a period of time. And many people want to convert as fast as possible.

Whether or not USD-to-CAD works well with DLR is a matter of opinion and whether you are comfortable suffering the multi day delay before you can convert the currency. I didn't mind waiting, but now I prefer the proper gambit method.


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## humble_pie (Jun 7, 2009)

james4beach said:


> What I meant is that if you are starting with USD, when you buy DLR.U this is a null operation. You still hold USD. Nothing has been converted yet and holding DLR.U is indistinguishable from holding the USD cash except as you point out, the fees are reducing the piggy bank.
> 
> The conversion takes place when, eventually, you sell the DLR side.


true. As mentioned, there are even folks who buy & hold DLR.U - at certain expense - as a piggy bank in which to store their US currency. 




> You have control and discretion as to when you make the sale and realize the conversion.


oh dear, u are skipping blindly over the salient fact, tch, which is that as long as the trader has been holding DLR.U, the canadian dollar has been fluctuating up & down. A USD piggy bank owner of DLR.U has zero control over this fluctuation, even while the days pass.

it doesn't matter where he stores his inventory of US dollars - banks, mattresses, DLR.U units, wherever - if he's holding USD or any proxy thereof, the relative value of CAD is going to fluctuate every few seconds.




> Whether or not USD-to-CAD works well with DLR is a matter of opinion


disagree! it's not a matter of opinion. It's a fact that DLR USD-->CAD, ie DLR.U-->DLR, does not work as well as the reverse, nor does it work as well as RY in USD arbitraged instantly to RY in CAD.

the history of the DLRs is that horizons betaPro invented them a few years ago when the TD was being especially uncooperative about journaling shares for gambit traders. Even today, the TD can be uncooperative now & then, as you yourself know very well. One should also consider that other brokers with incompatible mainframe systems can be even less cooperative than the big green.

do you remember CC, who co-founded & ran this website for years? he had a hand in developing the DLRs at horizons betaPro, a few years ago. The idea was to create a workaround to get past the balky brokers.

other writers popularized the DLRs for new gambit traders & eventually an urban myth was created that the DLRs are easy, surefire & guaranteed. It's true, they do work well for CAD-->USD. But not the reverse.


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## gardner (Feb 13, 2014)

humble_pie said:


> oh i am so sorry! but this is not accurate! it's only DLR.U that is pegged to USD. DLR is not pegged to anything.


Huh? DLR and DLR.U are the same thing. They share the same CUSIP -- 44049C401 

http://www.horizonsetfs.com/horizons/media/pdfs/factsheets/DLR-Fact-Sheet.pdf



> Since units of DLR and DLR.U share the same CUSIP, they are interchangeable in trading accounts through the
> process of journaling.


DLR and DLR.U are one and the same thing
that thing is pegged to $US -- 1 DLR = $US10.00


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## james4beach (Nov 15, 2012)

humble_pie said:


> do you remember CC, who co-founded & ran this website for years? he had a hand in developing the DLRs at horizons betaPro, a few years ago. The idea was to create a workaround to get past the balky brokers.


Wow I had no idea! Neat.

Well I used DLR's for the reverse, several times. In each case I achieved an FX conversion rate that was very low. I don't see the problem of holding DLR.U for a few days while the rates fluctuate. I had previously been holding the same US dollars for _months_, so it was a non-issue to me that I had to hold them a couple more days.

If I graph the time line of USD holding (U) and then converting to CAD (C) it would look like this with my regular gambit:

UUUUUUUUUUUUUUUU-C
And then using DLR reverse method, the only difference is a few more days of U
UUUUUUUUUUUUUUUU-*UUU*C

The *bolded* days are the extra delay stuck in USD before you finally convert to C. And yes, the fx rate fluctuates over this time, just as it fluctuated over all the preceding days.

I agree that DLR is ideal for the forward case and not well suited as a fast reverse gambit. In my case, after so much waiting on the USD, a few extra days being exposed to FX fluctuations made no difference to me. But now that I use ShoGam, I definitely prefer the advantages of the instantaneous FX conversion done exactly at the time I choose.


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## humble_pie (Jun 7, 2009)

gardner said:


> DLR and DLR.U are one and the same thing
> that thing is pegged to $US -- 1 DLR = $US10.00



so sorry, but only DLR.U is pegged .each:

the explanation is on horizons' website. The DLR holdings consist only of US short term paper. These provide the constantly stable USD side of this fund, in the way that a USD money market fund remains constantly priced at $10.

meanwhile the CAD side fluctuates.

here is a comparative DLR/DLR.U chart since inception. One can easily see that DLR.U is pegged, while DLR has fluctuated with CAD. The former has hovered constantly around $10, the latter has risen north of $14.00.


View attachment 8106


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## humble_pie (Jun 7, 2009)

james4beach said:


> If I graph the time line of USD holding (U) and then converting to CAD (C) it would look like this with my regular gambit:
> 
> UUUUUUUUUUUUUUUU-C
> And then using DLR reverse method, the only difference is a few more days of U
> ...




but jas4 you are talking about a holding period in USD while you engage in currency timing & currency speculation, u are not talking about the actual arbitrage transaction itself.

me i'm only talking about the arbitrage transaction itself. May i submit that the majority of gambit traders are not holding USD in storage. Nor are they waiting many days for what they believe is an opportune USD/CAD FX exchange moment. Rather, they're investors who gambit trade because they need a bunch of the opposite currency ASAP.

let's remember that arbitrage is the near-simultaneous buying of goods in one market while selling the same goods in a different market. Traditionally it's done to gain a profit. Our goals as small retail investors are different, all we want to do is exchange currencies without broker or bank FX fees. We're riding on the coattails of the professional arbitrageurs, in order to benefit from the magnificent spot rates that their work creates.

james4 i don't mean to argue with you. You know i think the world of you as a skilful gambit trader at a challenging broker, namely the TD where this strategy is not easy to carry out.

all i'd wanted to do was question the spreading urban legend that both DLRs are safe, guaranteed & easy, in both directions. Believe it or not, there's even a version of this legend which says that only DLRs, nothing else, must be used to gambit! 

at BMO - one of only 2 brokers whose platforms support miraculously fast, easy, cheap, instant online gambit trading - even at BMO the representatives tell me that they have plenty of clients who believe that, when gambit trading, they *must* use the DLRs.

to wrap up, sharing your own gambit crusades here in cmf forum has no doubt helped many people who are new to the idea & we all thank you, james4, very much indeed.


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## gardner (Feb 13, 2014)

humble_pie said:


> so sorry, but only DLR.U is pegged


Maybe the problem word here is "pegged".

Do you disagree that DLR and DLR.U are the same thing, with the same CUSIP?

The VALUE of a DLR/DLR.U unit is pegged to $10US.
The PRICE of DLR.U will always be $10US since that is the currency it's pegged to.
The PRICE of DLR will always be whatever $10US trades at in $CAN, on the spot market.

Obviously the PRICE of DLR in $CAN must fluctuate with the $CAN/$US spot rate -- that is the whole point.
But the VALUE is always pegged to $10US.


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## james4beach (Nov 15, 2012)

humble_pie said:


> let's remember that *arbitrage is the near-simultaneous buying of goods in one market while selling the same goods in a different market.*


OK, now you _have_ convinced me. Good point... that's what arbitrage is, by definition. Arbitrage should be an instant operation.

Are we on the same page if I say it this way? DLR can be used to convert USD->CAD, but with a delay. However, a gambit is meant to be an arbitrage trade, and DLR cannot be used to gambit USD->CAD.




> at BMO - one of only 2 brokers whose platforms support miraculously fast, easy, cheap, instant online gambit trading - even at BMO the representatives tell me that they have plenty of clients who believe that, when gambit trading, they *must* use the DLRs.


How sad! To be able to make true gambit trades, and then think you must use DLR.



> sharing your own gambit crusades here in cmf forum has no doubt helped many people who are new to the idea & we all thank you, james4, very much indeed.


Thanks to you & others here for introducing me to the concept and for helping me out with it. I've converted 75K so far with gambits!


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## RBull (Jan 20, 2013)

humble_pie said:


> but jas4 you are talking about a holding period in USD while you engage in currency timing & currency speculation, u are not talking about the actual arbitrage transaction itself.
> 
> me i'm only talking about the arbitrage transaction itself. May i submit that the majority of gambit traders are not holding USD in storage. Nor are they waiting many days for what they believe is an opportune USD/CAD FX exchange moment. Rather, they're investors who gambit trade because they need a bunch of the opposite currency ASAP.
> 
> ...


Good discussion on currency gambits. 

I've gambited about $500K in the past. I've never been in a rush necessarily to do the exchange and waited for decent opportunities moving from CDN to US $ to make US $ equity investments. I've used RY for the trade and executed them at DI, so it was a seamless process.

Now I find myself paying some attention in the other direction with some US cash, to be converted for an RRSP withdrawal to fund my CDN expenses and reinvest in TFSAs. 

This doesn't seem typical of what you've written above, but I don't really know what others are doing.


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## humble_pie (Jun 7, 2009)

james4beach said:


> Are we on the same page if I say it this way? DLR can be used to convert USD->CAD, but with a delay.



ummm i'd only be happy if you amended that to read DLR can be used to convert USD-->CAD, but with a possible delay during which CAD will continue to fluctuate.


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