08 Nov 2012 13 Comments
Norbert’s Gambit – Questrade
I had a previous post about how you can do Norbert’s Gambit with RBC Direct Investing, and I can finally report that it also works with Questrade.
The funny thing is that when we emailed Questrade to confirm whether or not it will work, the response was NO! Not letting that deter me, I did a bit of research online, and there were a couple reports that either a. the representative you talked to has no idea what they’re talking about or b. they’re blatantly lying to you to prevent you from doing the maneuver. That being said, a lot of people were reporting success with the maneuver, so I continued on.
The following is a step-by-step guide to convert CDN dollars to US dollars in your trading accounts using Questrade.
1. Ensure that your trading account has both a CDN side and a US side. VERY IMPORTANT – ensure that your account is set up so that all trades settle in Trade Currency. You may have chosen to settle in CDN dollars when you originally signed up for the accounts, which will make this whole exercise moot.
2. Purchase DLR on the CDN side of your account. The market is CDN and the proceeds will be in CDN dollars. Remember to put a limit amount in, as the trading volume for this is not very high.
3. Call or email Questrade to journal your shares from the CDN side of your account to the US side of your account. This can take up to 3-4 business days.
4. Once the shares show up on the US side of your account, it will still show up as DLR.U.
5. When you try to sell your DLR.U shares using their platform, it will be rejected. Apparently, you HAVE to call in to have this trade completed. When you call them, they have an automated message telling you that there is an additional charge for any trades made by them, so confirm that the only reason you are calling in to make the trade is that their platform does not allow you to sell DLR.U. As far as I can tell, the commission charges were as expected, and no additional fees have shown up on the account yet.
Has anyone else tried this with Questrade?
Thanks for reading! 
Mr.CBB’s Weekly Blog Post Picks Nov 9,2012 « Canadian Budget Binder
Nov 09, 2012 @ 16:23:54
[...] Norbert Gambit- Questrade-Vix Money [...]
Dec 17, 2012 @ 10:24:44
I did it with Questrade also. But I didn’t wait for the trade to settle, I did the buy, journal and the sell all on the same day. It worked great, except it took a 3 days for the US$ to appear in my account.
Dec 17, 2012 @ 15:25:37
That’s good to know that you can do it right away; did you call them to have it journaled over?
Feb 14, 2013 @ 14:12:33
Hi,
So I am trying gambitting for the first time (with Questrade). I bought DLR , I chatted with someone to have them journaled to DLR.U . Here is the reply I got:
=================================
> I will submit a request for this, I will follow up with you via email as soon as this is done.
Could you tell me approximately how long it should take before you send me an email?
> You can expect this within 2-3 business days.
=================================
You mentioned that you were able to sell DLR.U within the same day you asked for journaling.
I am not sure to understand how this can be done if the journaling operation has not been performed? This would be a margin call right? Would I need to pay any fee for such a margin call? Thanks!
Feb 15, 2013 @ 10:16:17
Hey Pierre-Luc,
I personally didn’t complete the transaction immediately; I wonder if the additional charges that Etienne had were because of the margin? I have always waited because I am paranoid about selling something I didn’t have. Might be worth a question to them to see what are the consequences if you try to sell right away.
Feb 15, 2013 @ 13:29:52
Hi,
I think I was a bit confused when I wrote my message above. Selling DLR.U before the trade between DLR and DLR.U is settled would be called a short sell, not a margin call. As far as I know there are no extra fee associated with a short sell, besides the discrepancy between the value of the shares during the short sell compared to the one when the trade get settled. Since the value of DLR.U barely changes, the fees that got charged to Etienne were probably ECN fees. ECN fees are per share fees that are only charged by Questrade when selling shares.
Feb 15, 2013 @ 15:05:47
If they were ECN fees, I think he was charged when buying and selling. Is your account automatically set up to do short sells? Not too familiar with that unfortunately, but thanks for the update!
Dec 20, 2012 @ 13:30:23
I chatted with a rep for the journaling, but I had to call to sell the shares.
Also, I saw in my account activity that they charged me 13.95$ of fees for both the buy and the sell. Not sure why, I tough the maximum fee was 9.95. I will probably ask customer support…
Dec 20, 2012 @ 17:36:35
I know they charge an additional amount if you call in and have them trade for you. It is definitely worth a call, and I would point out that you do not have a choice on the selling side as their platform is not currently able to do this.
Let me know how it goes!
Jan 09, 2013 @ 21:59:10
You had to phone to sell? So far I have only made purchases, but the IQ Essential interface seems to support selling shares. Did you have to phone to sell because the shares had been journalled? Something I will want to be prepared for when I try it myself.
Other people have reported success with gambiting, which was also reffered to as “arbitrage,” in Candian Money Forum, between CAD and USD Questrade accounts. Nice to know I can do it in the same account if I selected to set the account to settle in the trade currency.
I’m concerned about the delay. The first time I read about this, the writer described the share journaling was done instantly, but it was not with Questrade. It seems this should be possible with Questrade but a CMF user suspects from experiences that Questrade uses an ISM system (whatever that is) which makes it complicated, and he added that TD and Scotiabank use the same system and would have the same challenges, but that BMO and Royal Bank use an ADP system which is better for this purpose. In fact, even though outcomes were successful, there were reports that the journal was not done correctly the first time and they had to phone back.
One recommendation I have also seen is short sell and buy at the same time to avoid the risks of a price drop (or beneficial price increase) while you are waiting, and then dealing with journaling after, but you have an account that allows you to short sell, which would mean using a margin account at Questrade.
Feb 15, 2013 @ 16:30:18
I’m not sure exactly how it is possible but it did work (selling on the same day) and yes it was on a margin account.
As Vicky said, I was charge 13$ both when I bought and I sold them.
I kind of forgot about it and I didn’t ask Questrade why I was charged that amount (13$) for the trade.
PS: Etienne is a male name, so I’m not a “she”
Feb 15, 2013 @ 16:41:25
I would be curious to know why they charged you that amount, but thank you for the update! And my apologies for the mistake; I fixed it up!
Have a good weekend Etienne!
Jan 10, 2013 @ 09:55:56
Hey Nick,
I had to call to sell as DLR.U could not currently be traded on their updated platform.
Definitely watch for the trade currency issue, as I had another reader try it and he didn’t set up the trade currency correctly, so it just settled back into CDN, which was a waste of time and money.
Short sell and buy? What would the additional costs be for that? It does add a level of complexity, but might be worth checking out for those who are comfortable enough with trading to do that. I know the majority of people are nervous enough about the Gambit, so the short selling might deter them for sure!
Thanks for dropping by! Let me know if you decide to give it a shot!