Norbert's Gambit - Questrade chat to request journal of funds
Years ago when I started to read Canadian Couch Potato there was a suggested ETF sold in US dollars and since I only had Canadian money I looked for a cheap way to convert CAD to USD - apparently the way to go is to use "Norbert's Gambit":
Norbert's gambit remains the least expensive way to convert Canadian and US dollars at a discount brokerage. For investors looking to buy US-listed ETFs, learning this technique can save hundreds of dollars by sidestepping the wide currency spreads charged by brokerages. - Canadian Couch Potato
That sounds good to me since my goal is to pay minimal fees. Norbert's gambit in 4 steps looked simple so I tried it and it worked fine. I saved my chat with Questrade - step 3 of Norbert's gambit with Questrade - in case I needed to do it again in the future.
Here’s how you can use this ETF to exchange $10,000 Canadian:
1. Get a quote for DLR and calculate how many shares you can buy for $10,000 Canadian.
2. Place an order for that number of shares. The trade will settle in Canadian dollars.
3. Call your discount brokerage’s customer service desk and ask them to take your DLR shares and “journal them over” to the U.S. dollar side of your account, where they should show up as DLR.U.
4. Place an order to sell all of your DLR.U shares. The trade will settle in U.S. dollars.
I wasn't sure what "journal them over" in step 3 meant so I had a chat with Questrade:
Questrade Help: Thank you for contacting Questrade. How can I assist you today? DIYinvestor.ca: Hello I have 1000 shares of DLR, could you please journal them to my US account as DLR.U Questrade Help: Hello Mr. DIYinvestor I will be happy to help you with that. For security purposes can you please verify for me your Full Address [including postal code] and Date of Birth. DIYinvestor.ca: [security answers removed] Questrade Help: Thank you for answering the verification questions. Let me check your account. Please bear with me for few moments. DIYinvestor.ca: No problem, it's my RRSP account Questrade Help: I will submit a request for this to our back office to complete the process, The journal will be completed in 1-2 business days after your trade settles which takes 3 usiness days. DIYinvestor.ca: Alright, thank you That's all for now, have a good day! Questrade Help: You are welcome. Thank you for contacting Questrade. Have a wonderful day ahead. DIYinvestor.ca: You too, bye
That was it. Few days later my Canadian dollars ETF ("DLR") got converted to US dollars ETF ("DLR.U") and then I sold it and had US dollars in my account. The cost of doing it this way was much less than if I just used Canadian money to buy US based ETF and let Questrade convert the money for me.
Please note that I asked them to journal "to my US account as DLR.U" - I actually don't have a "US account", I only had one RRSP account that holds both Canadian and US funds. That was a beginner mistake on my part but they still understood what I meant.