Are the prices for DLR updated?
The prices for DLR and DLR.U are downloaded from Yahoo Finance whenever you refresh the page. Note that they have a 30 minute delay so they are not live prices.
On weekends and outside of trading hours, Yahoo Finance uses the closing markets for DLR and DLR.U. These will always be wider (less competitive) than the markets that you will see during trading hours.
Do I have to use DLR?
DLR has some advantages when it comes to CAD-USD conversions, but it is certainly not the only option. In general terms, you can use any stock that has a USD and CAD version (as long as they have the same CUSIP identifier).
Other securities with better liquidity (like RY) will help you to get an implied exchange rate closer to the spot rate. However, be aware that you might expose yourself to moves in the market and moves in that particular stock. This is less of an issue if your broker allows you to execute both sides of the Gambit at the same time.
Should I use a stock that I already own?
Let’s say you own RY in your taxable account. In that case, it most definitely would not be a good idea to use RY to exchange USD/CAD. There is a chance that you may trigger a large capital gain, and you will certainly need to do a lot more paperwork to figure out the Adjusted Cost Basis.
Equally, make sure that you don’t use a stock that you owned in the previous 30 days or will own in the following 30 days.
At what amount does Norbert’s Gambit become economical?
This really depends on the alternative. If your alternative is using the retail rate at your bank (around 1.5% from spot), then the Gambit usually becomes efficient at somewhere between $500 and $1000.
How exactly can I do this at my brokerage?
The exact instructions for each brokerage are quite different. Each broker has different procedures for journalling between the USD and CAD securities. In some brokerages you may need to wait for the first trade to settle before journalling the security and executing the second trade. If you are converting USD to CAD, this could leave you exposed to currency fluctuations for 3 or 4 business days.
Can you recommend a brokerage to use?
At the time of writing, RBC Direct Investing offers an easy and accessible platform for executing the Gambit. At RBC you can use the Gambit to both buy and sell USD relatively easily.
Where can I ask more questions about my specific brokerage?
Canadian financial forums are the best places to get detailed, current information on how to execute the Gambit. Here are some forums to check out: