# Help with Norbert's Gambit on iTrade



## 0xCC

I've been trying to help my father in law execute Norbert's Gambit on iTrade. I don't have an iTrade account so I am not exactly sure what steps he needs to use to complete the gambit. I am trying to do this remotely so I'm hoping someone here can give specific instructions I can send to him.

The current situation is that he has purchased DLR in his non-registered account and the trade has settled. My understanding is that iTrade doesn't have separate CDN and US accounts but it is possible to hold US dollars in the account and they won't be automatically converted to CDN.

He has tried to enter a sell order for DLR.U but he gets an error that he doesn't have the security he is trying to sell in his account.

Can someone that has done Norbert's Gambit in an iTrade account recently provide the steps required to complete the gambit?


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## AltaRed

Firstly, Scotia iTRade now has both CAD and USD sides to their registered accounts. They are not separate accounts, only sub-accounts of the same account. If your father has not yet enrolled for a USD side, then he has to do that first. It is not automatically provided just because he has a CAD RRSP account.

I've never used DLR nor DLR.U in Scotia iTRade so cannot help with that but I think what he is missing is that he has to first "journal" DLR over to the USD side of the account before he can sell it as DLR.U. There is a form for journaling securities over to the other (USD) side of the account but it may be faster to phone in and have a CSR/agent journal it over for him. The agent may also be willing to help him execute the DLR.U trade without extra commission cost.


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## humble_pie

0xCC said:


> I've been trying to help my father in law execute Norbert's Gambit on iTrade. I don't have an iTrade account so I am not exactly sure what steps he needs to use to complete the gambit. I am trying to do this remotely so I'm hoping someone here can give specific instructions I can send to him.
> 
> The current situation is that he has purchased DLR in his non-registered account and the trade has settled. My understanding is that iTrade doesn't have separate CDN and US accounts but it is possible to hold US dollars in the account and they won't be automatically converted to CDN.
> 
> He has tried to enter a sell order for DLR.U but he gets an error that he doesn't have the security he is trying to sell in his account.
> 
> Can someone that has done Norbert's Gambit in an iTrade account recently provide the steps required to complete the gambit?




variations of this ^^ are common

the FIL should obtain accurate information directly from scotia iTrade. It may be necessary to journal his DLR shares over to his US account & when that's accomplished he'll be able to sell em online.

or

at some brokers - BMO for example - it's necessary to phone to sell DLR.U but BMO kindly charges only a web commish for this sale.

i believe it's better for the FIL to speak directly to iTrade reps. They won't charge to give out information that wlll put him on the right track. It's a bit risky to rely on several remote transmissions of info coming from a series of parties in the chain.


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## 0xCC

Thanks AltaRed and humble_pie.

I found this thread that seems to confirm that a journal is necessary: https://www.canadianmoneyforum.com/...rt-s-Gambit?highlight=iTrade+Norbert's+Gambit

The problem I see with calling in and talking to a customer rep is that they won't understand that he is trying to do a Norbert's Gambit (and he doesn't completely understand what he is trying to do as this is his first time doing it). If it is just a matter of calling in and asking them to journal the shares from DLR to DLR.U that isn't as much of an issue.

If anyone can provide information on how to do the journal of the shares online I'd be interested in that.


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## humble_pie

^^

ok we seem to be heading in the right direction

i wonder if it's true though that scotia iTrade reps "won't understand" a gambit trade.

what i see is that TD & BMO reps are wondrously, marvellously knowledgeable & helpful nowadays. Was not always the case back in the day but has been stable sunny-side-up for a few years now.

we've read here in cmf forum that royal bank discount reps are also knowledgeable. So i just assumed that scotia iTrade reps were also in the pack.

tell your FIL Courage as we say here in quebec (koo RAHJE) Once he gets the hang of gambit trading he will never again, in his lifetime, have to pay an FX fee!


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## 0xCC

Doing a Norbert's Gambit is essentially doing an end-run around the brokerage's FX fees. So the reps might be knowledgeable about what is being attempted but they also might have an incentive to not make things as straightforward as possible to someone that sounds like they don't know exactly what they are doing.


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## humble_pie

i see your point ^^

but we passed through that stage - duelling with the brokers - many long years ago. There was even a time, back in the day, when half the TD's call centres were totally refusing gambit trades; so clients had to migrate their phone calls to the other call centres that were cooperating ... each:

it's been a few years now that TDDI reportedly struck a special committee consisting of senior managers plus the best among the licensed reps, all to figure out the best way to handle the steady flow of gambit traders.

after all, gambitting currencies is not illegal. It's just plain old arbitrage. Buy in one market, sell in another market to gain an advantage. Been around hundreds of years.

eventually, committees & all, the brokers settled down to realize that a) only a small minority of clients will ever actually gambit; b) it isn't illegal & brokers cannot stop the practice; c) since brokers couldn't beat the gambit traders, they decided to join em while charging as healthy a fee as possible & offering excellent service.

your FIL is doing fine for a first time arbitrage trade. By fine i mean he set off in the right direction, he slowed down when he came to an impasse & asked for your help, most importantly, he didn't make any mistakes. From now on gambit trading should be easy for him.


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## AltaRed

0xCC said:


> Thanks AltaRed and humble_pie.
> 
> I found this thread that seems to confirm that a journal is necessary: https://www.canadianmoneyforum.com/...rt-s-Gambit?highlight=iTrade+Norbert's+Gambit
> 
> The problem I see with calling in and talking to a customer rep is that they won't understand that he is trying to do a Norbert's Gambit (and he doesn't completely understand what he is trying to do as this is his first time doing it). If it is just a matter of calling in and asking them to journal the shares from DLR to DLR.U that isn't as much of an issue.
> 
> If anyone can provide information on how to do the journal of the shares online I'd be interested in that.


I think Scotia iTRade reps understand NG just fine, but the first step is the need to journal over DLR to the USD side of the account. I've done a number of journals of stocks from one side to the other, either by phoning in (no big deal) or online. 

To do this online, he has to first have a USD side to his RRSP account. If he does not have that yet, he must first 'enroll to enable USD side of registered account". To do that, he goes online, then....
1. go to his RRSP account in the dropdown menu
2. Click on Additional Services
3. Click on the link "enroll to enable USD side of registered account" and click on the RRSP box on that page. I don't know whether that takes effect immediately, or takes a business day or two....

If he already has a USD side to his RRSP account, then.....
A. go to his RRSP account in the drop down menu
B. click on Additional Services
C. click on the link "transfer securities and funds between accounts"
D. fill out the form provided making sure he is moving DLR and number of units from RRSP CAD to RRSP USD (it is pretty simple)

I don't remember if this takes effect immediately, or needs a business day or so for the transfer to happen. It likely takes overnight (1 business day) but may be instantaneous.


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## 0xCC

Thanks AltaRed.

This is in his non-registered account. Do all the same menus exist on the non-registered side?


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## AltaRed

0xCC said:


> This is in his non-registered account. Do all the same menus exist on the non-registered side?


Yes, sorry. It should remain the same. I already have a USD side to my Cash account, so I don't have an option to enroll in a USD side. For some reason, I mis-read your original post....


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## 0xCC

My FIL called in this morning and the customer rep told him to use the online form to do the transfer. The rep said to put a note in the form to journal the shares to DLR.U on the US side. That should hopefully happen overnight and if everything goes well he should be able to sell DLR.U tomorrow.


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## 0xCC

Ok, final update from my FIL. He called in to do the transfer from DLR to DLR.U on Monday and was told he could use a form to do that. He did and he waited until today (Wednesday) and didn't see DLR.U in is account so he called in again.

This time the customer rep told him they could do the journal over the phone for him and he could do the sale of DLR.U online before the end of the day. The rep said that if he didn't do the sale on that day overnight the DLR.U would be journaled back over to DLR.

So once the rep did the journal from DLR to DLR.U he was able to do the sale today and the cash appears to have stayed in US dollars in his account.

It is a bit of a process but at least he could get it done without paying the $65 broker assisted commission.


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## AltaRed

0xCC said:


> The rep said that if he didn't do the sale on that day overnight the DLR.U would be journaled back over to DLR.


That is bizarre. Never heard of anything like that before, but I've never traded DLR/DLR.U


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## humble_pie

0xCC said:


> This time the customer rep told him they could do the journal over the phone for him and he could do the sale of DLR.U online before the end of the day. The rep said that if he didn't do the sale on that day overnight the DLR.U would be journaled back over to DLR.




every broker has got one or more tiny weird nano-glitches in the DLRs. These vary from broker to broker, depending upon an individual broker mainframe & architecture; however i have never heard of any broker that does not have a DLR/DLR/U quirk or two.

is why i suggested that the FIL should contact the broker reps early in the game, in order to learn what the scotia iTrade DLR nano-glitches are & how to work around them.

minor atypical positionings during the day are common in broker systems. These revert back to system default positions overnight. Option margin positions do this, for example.

we should keep in mind that DLR.U is a USD denominated stock that trades in the tiny USD section of the TSX only. It does not trade on any US market wheresoever. It is this detail which is causing the DLR/DLR.U nano-glitches at most brokers.

it's totally reasonable to believe that the scotia iTrade architecture is able to extend DLR.U over to the US side of an account where it can be traded during trading hours; but overnight the system requires that DLR.U then revert back to its canadian side 'home" since it is a canadian stock, not an interlisted stock.

in this case - so helpfully described by the OP - it sounds as if the 2nd rep the FIL reached had more experience & was more knowledgeable than the first rep. Such a range of knowledge & experience among licensed reps is also very common at discount brokers.

all's well that ends well, as they say. Next time doing a gambit pair will be a breeze.


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## gardner

humble_pie said:


> DLR.U is a USD denominated stock that trades in the tiny USD section of the TSX only.


Do we imagine that they therefore play the same monkey business with ZSP.U? I think that could be a significant concern. If they are singling out DLR, then they are just being shits. If they are genuinely unable to remember which section a holding is meant to reside in, I would say that they are kinda dumb shits.


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## AltaRed

gardner said:


> Do we imagine that they therefore play the same monkey business with ZSP.U? I think that could be a significant concern. If they are singling out DLR, then they are just being shits. If they are genuinely unable to remember which section a holding is meant to reside in, I would say that they are kinda dumb shits.


Not sure what you are talking about but I have ZSP.U in my portfolio. It is not the same CUSIP as ZSP and is therefore not an interlisted stock for an NG.


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## gardner

AltaRed said:


> It is not the same CUSIP as ZSP and is therefore not an interlisted stock for an NG.


That's not my point. It is a US$ issue, traded only in TSX. So does iTrade automagically journal it to your C$ account against your best interest, therefore bagging the currency exchange premium on all your dividends? If they don't, then they seem to be singling out DLR.U, which would be a shitty move.


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## AltaRed

You picked on ZSP.U, a Canadian domiciled ETF, traded on the TSX in USD. People thus buy and hold ZSP.U on the USD side of their account (as I do in Scotia iTRade) and get distributions paid in USD by BMO in that side of the account. ZSP.U really is no different than any other holding.


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## gardner

AltaRed said:


> ZSP.U really is no different than any other holding.


So does iTrade REALLY move DLR.U between sections without direction to do so? If so, it would make ZSP.U different to DLR.U.

Obviously we don't expect ZSP.U or, indeed any other holding, to be automagically journaled around between sections without our specific direction to do so. Reports are that iTrade nonetheless actually does this with DLR.U for some reason that I do not fully understand. Is it actually true? If it is, what makes it right and proper for them to move DLR.U but not obvious that ZSP.U should be subject to the same logic?

And in case it is not clear, it is this information I am trying to make sense of:



0xCC said:


> The rep said that if he didn't do the sale on that day overnight the DLR.U would be journaled back over to DLR.


Is that in fact true that this happens with iTrade?


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## humble_pie

gardner said:


> That's not my point. It is a US$ issue, traded only in TSX. So does iTrade automagically journal it to your C$ account against your best interest, therefore bagging the currency exchange premium on all your dividends? If they don't, then they seem to be singling out DLR.U, which would be a shitty move.



there are no dividends in the DLRs. They were created by Horizons strictly for gambit traders whose brokers required the T+3 (nowadays T+2) settlement period for the buy side, before an investor could sell the gambit currency carrier stock. Such brokers were then - & remain today - the majority of brokers. Only BMO & roybank have mainframes that permit instant online gambit trading.

licensed reps at all brokers other than BMO & roybank have workarounds that permit them to override the blockages to instant gambit trading caused by their mainframe architecture. However each broker has its own individual policy about the commissions it will charge, once the reps get involved in live rep-handled trades.

scotia iTrade appears to be blameless in the manoeuvre that was described in this thread. We should all be grateful to the OP for posting his FIL details, since not too much had been known about how-it-works at scotia iTrade. Now we have better information on gambit trading at scotia, thankx!


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## AltaRed

gardner said:


> Is that in fact true that this happens with iTrade?


Which is why I said that was a weird statement pertaining to DLR.U. I know nothing about DLR or DLR.U and have never wanted to know actually.


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## humble_pie

gardner said:


> So does iTrade REALLY move DLR.U between sections without direction to do so? If so, it would make ZSP.U different to DLR.U.
> 
> Obviously we don't expect ZSP.U or, indeed any other holding, to be automagically journaled around between sections without our specific direction to do so. Reports are that iTrade nonetheless actually does this with DLR.U for some reason that I do not fully understand. Is it actually true? If it is, what makes it right and proper for them to move DLR.U but not obvious that ZSP.U should be subject to the same logic?
> 
> And in case it is not clear, it is this information I am trying to make sense of:
> 
> Is that in fact true that this happens with iTrade?




oh dear. You are making a mountain out of what is less than a molehill & all the ess aitch eye tee cursing isn't helping your case either.

if you want a broker whose architecture is built - for whatever reason - to "restore" some stocks back to an opposite currency position, perhaps you'd want to think about Questrade. 

in any event, please do stop picking on scotia iTrade. The gambit trades chronicled in this thread sound totally benign to me. The thread is actually a good teaching module for how-to-gambit at scotia. Let's close by thanking the OP for his posts.


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## 0xCC

gardner said:


> Is that in fact true that this happens with iTrade?


I am only relaying information my FIL provided to me. Not sure if he misheard or misinterpreted what the rep said but that is my understanding of the information he received from the person he was talking to at iTrade.


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## pinkod

Hi everyone, I am trying now to gambit with iTrade.
1. Bought dlr
2. Filled the form online to transfer dlr from CAD side of TFSA into dlr.u on US side of TFSA.

Today (Saturday) noticed that dlr was transferred to US side yesterday (Friday). I was busy yesterday so I did not notice it.

But now when I try to sell DLR.U from my US TFSA side it shows me a message that “Your account does not hold sufficient shares of this security”. In fact, I my US side I see DLR but not DLR.U.

Just wondering what can be an issue.


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## AltaRed

You will have to wait until Tuesday to phone and find out. It may simply a symbol issue.


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## pinkod

Yeah, when I try to sell it as DLR in my US TFSA side it works, but with CAD - USD exchange fees.
When trying to sell as DLR.U - showing a message I don’t have those shares.

Maybe they journaled dlr into dlr.u yesterday but since I did not sell them dlr.u automatically went into dlr during the night as mentioned above in this thread?


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## pinkod

So I called iTtade today. I waited just a minute on the line and was connected to a broker and asked him to journal over some of the shares. I did not even need to tell him what exactly I want, once he acceded my account he just asked me if I want to journal all the dlr into dlr.u. I said yes and it took him like 2 minutes. Also, I asked if dlr.u are going to turn into dlr again during the night, but he said they shouldn’t. I can’t sell them today because the market is closed and need to wait until tomorrow, so let see if dlr.I will survive overnight and don’t turn to dlr again.


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## pinkod

Final update:dlr.u turned back into dlr overnight indeed. I had to call again next morning (few minutes wait time) and speak to a trader. It was painless. He changed my dlr into dlr.u again and I sold it.
Hope the information will be helpful for people looking how to gambit with iTrade.


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## afulldeck

Has anyone use XAW and XAW.U for Norbit's gambit on itrades?


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## AltaRed

I don't know if they are the same CUSIP. I know that ZSP (CAD version) and ZSP.U (USD version) are not and cannot be used for NG. Better check that first.....


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## afulldeck

@AltaRed. Thanks. Can you explain a little further as I am not sure what CUSIP relationship with NG is specifically? On the Blackrock site, I found cusips for XAW (46435d109) and XAW.U (46435D208) are different. But I thought the only difference between the two is what currency its traded in even though both trade on TSX. I already have a strong position in XAW and wanted to convert to some to USD. I figure that it should only be a call for journally some of my position over to USD. Guess I'm incorrect?


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## AltaRed

It is my understanding that it has to be the identical security (CUSIP) to buy/sell on the exchanges. IOW, I don't believe you can buy XAW on TSX with CAD, journal over to get XAW.U, and then sell XAW.U on the TSX to get USD because they are NOT the same security. Whereas interlisted stocks like BCE or TD have identical CUSIP numbers on both the TSX and NYSE.

If you want to be certain, ask your brokerage....but be sure to articulate the CUSIP numbers are different.


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## Ponderling

I did dlr at Itrade, in last two months and it does take a bit of leg work.
In rrsp with us side already set up, Sell ex cdn securitie(s) to raise cdn cash. wait for it to settle 
Buy DLR cdn side monday am, wait for it to settle cdn side, journal request to us side, when it turned up there ( ask thurs 3 pm or so, was there next mon am it was usd version)
Sell, wait for that sale to settle.
Buy the usd stocks/etf's i wanted. 

I moved about $400k cdn, and the saving over the quoted direct exchange spread at itrade was more than $3700cdn. So to me a few days stick handling the trade using DLR as worth it to me.


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## robfordlives

Gonna finally attempt this in Itrade. I notice DLR is down 0.19% today. Am I risking something here just to possibly save a few bucks? On $100,000 that would be a $1900 loss if it takes a couple days to settle before journaling...or am I misunderstanding this process?


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## robfordlives

robfordlives said:


> Gonna finally attempt this in Itrade. I notice DLR is down 0.19% today. Am I risking something here just to possibly save a few bucks? On $100,000 that would be a $1900 loss if it takes a couple days to settle before journaling...or am I misunderstanding this process?


Also with Itrade I am unclear about the journaling process after buying. I do not see any drop down menu regarding transfer of securities. Guess only way to do it is to call?


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## robfordlives

PWL has an article how to do this I see. I don't understand why a phone call is ever needed...they mention in their document to call in to place the sell order once the journalling happens to US account. Why? Anytime I call Itrade it is 2 hour wait



https://www.pwlcapital.com/resources/norberts-gambit-scotia/


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## AltaRed

At Scotia iTrade, journalliing can be done online via a form. In your brokerage account Account Summary

select Additional Services
Click on Transfer Securities and Funds Between Accounts
Fill out the form

My experience is it takes upwards of one business day depending on time of day one submits the form. I don't know if it works well with DLR/DLR.U. Never done an NG using this methodology. I've always used an interlisted stock.


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## Jimmy

I am w MD Investments. They are using Qtrade now but in Nov moving to Scotia iTrade (MD bought by Scotia IT) . They will be consolidating my USD and CAD accounts into a 'multicurrency' account.

Has anyone done NG w DLR now? No calling?


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## Jimmy

FYI Update I just did Norbert's today on iTrade for the 1st time. ( Was on Qrtade w MD but Scotia bought MD so on iTrade now) 

Steps Cdn to US $ in TFSA

Buy DLR on Canadian side of TFSA
Call and select Trading option (not too long wait maybe 10 min) 
Tell a trader to move DLR (Cdn account in TFSA) over to DLR.U (US account in TFSA) at no charge as you can't do this trade online. They do this while you are on the phone and you just refresh your screen and it is done.
Sell DLR.U in your US TFSA account
The trader said you have to wait a day until the DLR.U trade settles to access the cash.


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## Jimmy

AltaRed said:


> At Scotia iTrade, journalliing can be done online via a form. In your brokerage account Account Summary
> 
> select Additional Services
> Click on Transfer Securities and Funds Between Accounts
> Fill out the form
> 
> My experience is it takes upwards of one business day depending on time of day one submits the form. I don't know if it works well with DLR/DLR.U. Never done an NG using this methodology. I've always used an interlisted stock.


I think you can do that but you will then have DLR in your US account (for cdn to US transfer) . DLR wont change over to DLR.U (for a Cdn to US transfer) so you will have to get trader to sell it for you. In my earlier post it is easy to just call a trader who can journal the ETF and change to the .U version.


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## AltaRed

Are you sure about that at Scotia iTrade? One makes the symbol change request as part of the online journal request. To go from CAD to USD, in the message box of the journal form, one would say "journal DLR units from CAD sub-account to DLR.U units in USD sub-account".

I've not gone that direction, but have from USD to CAD and my journal message is: "Journal DLR.U from USD sub-account to DLR units in the CAD sub-account" There is a bonus.... Only one commission is charged and that is to buy DLR.U with USD. There is no commission to sell DLR to CAD

Added: It is a one day wait for the online journal to occur,


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## Jimmy

Ok That may work then. I noticed that too re the commission


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## handyguy

I am trying my first attempt at NG on Scotia ITrade. I purchased DLR and journaled it over to the USD side of my cash account (took about 2 days to journal.) Now I am trying to sell the DLR.u to end up with USD in the USD side of the account. However, the sell window will not let me enter DLR.U, only DLR - and then it warns me it will convert the sale into the currency of that account - not sure if that means it will remain in USD. Any idea how to proceed?


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## AltaRed

I have never gone that direction with DLR/DLR.U at iTrade so cannot help but the screen is not looking right to me. I recommend you call iTrade Monday morning to ask them how this plays out to be sure.

When you journaled DLR over to the USD side, did you also provide an accompanying message in the transfer box asking them to show DLR in DLR.U units once journaled? It may be the grunt in the back room didn't tag it right.


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## handyguy

I don't recall specifying that it be listed as dlr.u in the USD side. I'll call itrade on monday. Thanks.


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## handyguy

I called itrade this morning, and the agent said he has to manually mark the dlr as intraday trade to dlr.u. I could sell the dlr.u at that point. so it looks like you still have call itrade to complete the dlr transaction into the USD side of the account.


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## AltaRed

handyguy said:


> I called itrade this morning, and the agent said he has to manually mark the dlr as intraday trade to dlr.u. I could sell the dlr.u at that point. so it looks like you still have call itrade to complete the dlr transaction into the USD side of the account.


Good to know but I still believe you can ask them to do that as part of the online journal request. There is a message box for that sort of instruction. Try that the next time you do a DLR--->DLR.U trade. 

I use the message box going the other way, i.e. when DLR.U moves to CAD side, they are instructed from the message box to record it as DLR on the CAD side.


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## handyguy

I'll try that next time, thx!


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## Jimmy

FYI If you purchase DLR or DLR.U you have to wait until the end of the day for the DLR purchase to settle first before using the form. Did a NG w a trader who confirmed this (may use form in future)


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## AltaRed

I don't do that. I simply indicate on the "message box" of the form to journal it when it settles. So if I bought DLR today (21st), I'd issue the journal form today with that message (to journal when settled as DLR.U on the USD side of account) and by the morning of the 23rd, it will be journalled and show as DLR.U on the USD side of the account.


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## Jimmy

Ok, good to know. I will use the form next time.


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## Jimmy

I just tried the form method and it doesn't seem to work. I waited 3 days and the trade never went through. Further I spoke to a trader and she said they can only do DLR to DLR and then you have to call them to do the adjustment to DLR.U. IMO it is easier to call them wait 15 min and request they do the manual adj then you can sell DLR.U immediately.


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## AltaRed

The form is only for a journal, not the trade itself, but sure, if you are going to sell as soon as the journal is done, easiest is to simply phone and do both at the same time.


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## Jimmy

Sorry I meant journal/adjustment. I was told they will move DLR ok but not do the adjustment to DLR.U ( when moving DLR CAD acct to DLR.U in the US acct)


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## AltaRed

Sorry to have misunderstood. I've only gone the other way... from DLR.U to DLR so was not aware of the need to call in.


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## allenn5

Here's a link: hope it helps...








Norbert’s Gambit: The Complete Guide | Canadian Couch Potato


[This post was updated in February 2015 to reflect recent changes at some brokerages.] Norbert’s gambit remains the least expensive way to convert Canadian and US dollars at a discount brokerage.



canadiancouchpotato.com


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## AltaRed

That link/article is hugely out of date and it is especially out of date for Scotia iTrade. Last update 2015.


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