norbert_to_nie_imieIn his MoneySense blog item, Norbert’s gambit: A better way to buy U.S. dollars, Dan Bortolotti explains how to use the Norbert Gambit to exchange Canadian dollars into U.S. dollars for a lesser fee. He says the gambit is named after Norbert Schlenker who pioneered the idea of using shares listed on both Canadian and U.S. exchanges to exchange currencies for less.

This works especially well given a brokerage account that doesn’t charge to purchase ETFs.

Basically, you use the Horizons U.S. Dollar Currency ETF (Ticker: DLR.TO) and the US dollar version DLR.U.TO.

First, get a quote for DLR.TO to calculate how many units you need to buy for the required number of Canadian dollars you want to convert.

Purchase the required number of DLR.TO units using a limit order with your Canadian trading account. The trade will settle in Canadian dollars.

Call or email your brokerage and ask them to take your DLR units and “journal them over” to the U.S. dollar side of your account, where they should show up as DLR.U.

Once the order has settled (which can take a few days), place an order to sell all of your DLR.U shares. This trade will settle in U.S. dollars.

 

By the way, you might be wondering about the photo attached to this post. I Googled “Norbert” and found there seemed to be some Polish meme dedicated to “Norbert  to nie imie”, which seems to mean “Norbert is no name”. So, from what I can tell, this photo’s cation says,  “Norbert is no name. Norbert is a stupid head”. Laughed? I nearly died.