Converting currency cheaply: Norbert’s Gambit

A quick reference post on how to convert Canadian dollars to US dollars cheaply (i.e. without paying the exorbitant 2% broker fee).

The concept is to choose a liquid stock trading on both the Toronto and New York stock exchange.  Buy in Canada, sell in New York and the conversion is complete.

Example:

– Buy 100 RY on TSE from CDN account using Canadian dollars.
– Sell 100 RY on NYSE, specifying funds going into USD account, for US dollars.

Note: you must select US$ account, and specify to sell on NYSE. The $US funds should be available immediately.

I recently achieved 1.030 including commissions, below the noon posted rate of 1.034!  The bank rate would be 1.050+.

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