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Norbert’s Gambit at CIBC Investor’s Edge

April 25, 2017 - 14 comments

CIBC Investor’s Edge is the latest brokerage to offer US dollar RRSP accounts. This is good news for cost-conscious ETF investors, as it allows them to save even more money each year by holding US-listed foreign equity ETFs in their RRSP accounts. Opting for this ETF structure in an RRSP account can generally save investors about 0.30% per year in product fees and foreign withholding taxes.

This is all well and good if you already have US dollars available for investment, but what if you only have Canadians dollars?  

One of the cheapest ways to convert your unwanted loonies is called Norbert’s gambit. As this strategy can be intimidating for newbie investors, I’ve put together a video tutorial that will make your first gambit a successful one. In the example, I convert about 10,000 Canadian dollars into US dollars within my RRSP account (I’ve also included step-by-step instructions below the video).


Step 1: Buy DLR on the Canadian stock market in your Canadian dollar RRSP account at the current ask price.

The first step is to purchase shares of the Horizons US Dollar Currency ETF (DLR). The fund invests in US dollar cash equivalents, but can be purchased with your Canadian dollars.

In order to determine the number of shares of DLR that you would like to purchase, just take the $10,000 CAD that you would like to convert, subtract the $6.95 trading commission, and divide by the current ask price, which is $13.22 in our example – this equals 755 shares (just round down to the nearest whole share).

Trading Screen: CIBC Investor’s Edge

Source: CIBC Investor’s Edge as of March 31, 2017


Step 2: Call CIBC Investor’s Edge at 1-800-567-3343 and ask them to transfer 755 shares of DLR from the Canadian dollar RRSP account to the US dollar RRSP account.

When I called CIBC, I explained to the trader what I was trying to do, and there were no issues at all.  After they had entered the instructions into their system, they offered to take care of the third step for me on the same phone call.

Step 3: Ask the CIBC trader to sell 755 shares of DLR.U in the US dollar RRSP account on the Canadian stock market at the current bid price.

DLR.U is the exact same security as DLR.  The only difference is that DLR.U is transacted in US dollars, while DLR is transacted in Canadian dollars.  

It is extremely important that the trader sells DLR.U in your US dollar RRSP account, not DLR, so have them confirm the order back to you before proceeding with the trade.  Also confirm that you will be paying the $6.95 online trading commission for this trade.

To verify that the trade has been completed successfully, go to the Account Holdings page and click on the Intraday Changes tab. Select the US dollar RRSP account from the drop-down menu and then click on Get Holdings.

You should now see a positive US dollar cash balance, as well as a negative quantity of DLR shares (these will disappear once CIBC processes your transfer request). You are now free to purchase US-listed ETFs with the cash available in your US dollar RRSP account.

Account Holdings: CIBC Investor’s Edge

Source: CIBC Investor’s Edge as of April 5, 2017.


By: Justin Bender with 14 comments.
  28/06/2018 12:13:54 PM
Justin Bender
@Alan: The trades can all be processed on the same day.
  21/06/2018 12:06:20 AM
Is this all done within one business day or do you have to wait for trade to settle? Thanks for this article!
  07/05/2018 4:20:41 PM
Justin Bender
@RG: You’re very welcome – glad I could help :)
  26/04/2018 2:36:48 PM
Thanks so much for this step-by-step. FYI - I called to confirm I needed to speak to someone as I've executed NB using RBC DI many times, but recently moved my $ to CIBC. He confirmed, and actually did the whole thing for me - buying DLR with my CDN$, journaled it over and then sold DLR.U in USD$. So, it was really easy! Thanks again.
  10/11/2017 11:03:19 AM
Justin bender
@Bruce: You would have to check with CIBC to see if this is possible. At the very least, you should be able to request a US dollar cheque from your CIBC Investor’s Edge US dollar investment account and deposit it manually into your CIBC US dollar bank account.

To compare the benefit of using Norbert’s gambit vs. accepting the bank’s FX rate, you’ll have to calculate how many US dollars you would receive by doing the gambit (after commissions) vs. how many US dollars the bank quotes you with.
  08/11/2017 10:04:07 AM
Justin bender
@Jason: Glad to hear everything went relatively smoothly!
  04/11/2017 6:25:37 PM
I am trying to find the best exchange rate to buy US $ for our winter US travels. After completing the process you describe can the Non-registered INV Edge account be associated with a CIBC US$ bank account so I can transfer the US $ to my bank account?.
How does the exchange rate used in this process compare to transferring money from my Cdn Chequing acct to my US Chequing acct?
  26/10/2017 10:51:18 AM
I just went through this with CIBC and it went fairly smoothly. There is a brief pause while waiting for the system to move DLR from the CAD side to the USD side. The other thing I encountered was the trader was briefly confused, thinking I wanted to sell DLR on the US market (which is a totally different security), so be sure to confirm they really are transacting DLR.U on the Canadian market. He had his AHA moment when I explained DLR.U is the same security as DLR, transacted in US dollars. You definitely have to do this part on the phone with them; he said I wouldn't be able to enter that in the system myself, and he completed the trade at the $6.95 commission rate. All good.
  20/10/2017 11:18:03 AM
Justin Bender
@Marc: You are correct – you would buy DLR.U on the Canadian stock market (but using cash from your US dollar account). It will then need to be transferred to your Canadian dollar account and sold as DLR on the Canadian stock market.
  13/10/2017 4:32:54 PM
I'm trying to convert USD to CAD.

Do I buy DLR.U listed under CDN and select USD Investment Account? I
did not find any DLR matching Horizons on the US stock exchange.

If so, isn't DLR.U already on TSX? Why would I need to transfer it then to CAD Investment Account?
  01/09/2017 9:30:58 AM
Justin Bender
@Tim: I was able to complete the entire Norbert’s gambit in one phone call. The USD cash is available immediately as long as you are purchasing a security that settles on T+3 (or T+2, effective September 5, 2017).
  30/08/2017 2:18:58 PM
Were you able to complete the whole Norbert's Gambit transaction in one phone call and the US funds were immediately available to use?
  17/08/2017 10:13:04 AM
Justin Bender
@Crystal: Nobert’s gambit can also be implemented in a non-registered account at CIBC Investor’s Edge.
  14/08/2017 9:39:17 AM
Does this has to be done in RRSP accounts? How about just a regular Investor's edge account?

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