Investing

Trading stocks in US currency: best least expensive options?

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  • Jun 17th, 2020 12:41 am
[OP]
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Aug 14, 2019
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Trading stocks in US currency: best least expensive options?

There seems to be a huge currency spread between the bank buy and sell rate.

Aside from converting your CDN funds via a Currency brokerage firm like Everforex and parking it in a Canadian bank but in a US account. What are your best options if you want to be a very casual NY stock exchange trader?
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Jun 19, 2009
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Scarborough
Interactive Brokers has the best retail FX rate from what I've seen
[OP]
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How is their site in terms of being user friendly? Any hidden fees that noobies should be aware of?
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Nov 28, 2007
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Whitehorse, YT
sheyenne wrote: There seems to be a huge currency spread between the bank buy and sell rate.

Aside from converting your CDN funds via a Currency brokerage firm like Everforex and parking it in a Canadian bank but in a US account. What are your best options if you want to be a very casual NY stock exchange trader?
Use Norbert's Gambit to do the conversion ... assuming you have a decent amount to convert but make sure your banker will transfer stock from the Canadian to the US side.
[OP]
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Marzipan wrote: Use Norbert's Gambit to do the conversion ... assuming you have a decent amount to convert but make sure your banker will transfer stock from the Canadian to the US side.
Thanks. Can we not trade ourselves using a discount brokerage account such as Questrade or someone else that you recommend?
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Whitehorse, YT
sheyenne wrote: Thanks. Can we not trade ourselves using a discount brokerage account such as Questrade or someone else that you recommend?
Your question is not clear. Obviously we can trade on-line without human help. But if you are asking about moving the stock to the US side of your account i can tell you that with BMOIL you need to call in and with TDW it can be transferred on-line though I think you have to wait until the trade has settled.
[OP]
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Marzipan wrote: Your question is not clear. Obviously we can trade on-line without human help. But if you are asking about moving the stock to the US side of your account i can tell you that with BMOIL you need to call in and with TDW it can be transferred on-line though I think you have to wait until the trade has settled.
I am sorry my question wasn't clear.

What I meant was if it's normal protocol to use more than one service or broker to convert Canadian to US funds. Then park the money somewhere and use another service to trade. I don't know what BMOIL or TDW means. Sorry, I am a complete noob.
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Aug 18, 2003
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YVR
sheyenne wrote: How is their site in terms of being user friendly? Any hidden fees that noobies should be aware of?
yes. The highest commission rate around. 1 penny a share for cnd stocks. 1/2 penny us stocks.

so....5000 shares TSE is $50. 5000 shares on NYSE is $25.

most other places charge $10 flat rate.

no need to be that expensive but thats IB for ya.
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Sep 9, 2004
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Marzipan wrote: Your question is not clear. Obviously we can trade on-line without human help. But if you are asking about moving the stock to the US side of your account i can tell you that with BMOIL you need to call in and with TDW it can be transferred on-line though I think you have to wait until the trade has settled.
Which stock(s) do you do this with BMOIL?
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Whitehorse, YT
osc wrote: Which stock(s) do you do this with BMOIL?
I've only done this once with BMO and that was in 2008 to buy a car in the US. I bought Methanex (MX) and switched it to MEOH to sell it. Any inter-listed stock that has trades plenty and is not too volatile will work. MX is volatile today. Today, I would use one of the banks - a bit less volatile.
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Canada, Eh!!
sheyenne wrote: I am sorry my question wasn't clear.

What I meant was if it's normal protocol to use more than one service or broker to convert Canadian to US funds. Then park the money somewhere and use another service to trade. I don't know what BMOIL or TDW means. Sorry, I am a complete noob.
You can use same broker to convert currencies and trade or a different broker/exchange company but then longer wait as have to transfer funds.

I'm not expert... Interactive Brokers has best exchange rates to simply convert currencies. Other brokers it is normally better for amounts more then 10k to use something called Norbert's Gambit.

https://www.finiki.org/wiki/Norbert%27s_gambit

https://canadiancouchpotato.com/2013/12 ... ete-guide/

The actual moving/journaling of shares from one currency to another [eg. Royal Bank RY can be held in CAD funds from Toronto exchange or in USD funds from New York exchange] is either done thru a telephone call to broker or some allow to do yourself online.

BMOIL = Bank Of Montreal Investors Line [discount brokerage]
TDW = Toronto Dominion Waterhouse [discount brokerage]

Think your best bet is to use any of the higher rated bank brokers or perhaps Questrade or Qtrade. Then use Norbert's gambit.
.......
July 13, 2017 to October 25, 2018: BOC raised rates 5 times and MCAP raised its prime rate next day each time.

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Jan 26, 2020
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Canada
You should mention how much money you're dealing with. It sounds like its just a few thousand. Be careful of IB as there prices are much more expensive for many people that are used to a $7-$10 flat trade cost. It depends on the number of shares you are trading.
An easy way to convert to US is just buy a stock in CAD that is traded on both exchanges and get your broker to journal it to the US market (free). There's a lot to choose from.
With trading you have commission costs, broker execution and customer service, charts and a few others.
TD ThinkorSwim has good charts but you need $5000 US to use them and its only for US stuff.

Yahoo Finance and Trading View (better) has pretty good real time online charts for free. Yahoo has after hours info. TV doesn't. Investing.com is better for alerts. Alerts are crucial if you want to know what's going on and have a phone on you all the time or are in front of a computer 9:30-4:00 EST.
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Nov 18, 2007
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Valleywood
Horizon Beta Pro ETFS DLR and DLR.u (both trading on the TSX) are good choices for Norbert Gambit.

A key point to doing any Norbert Gambit is having a brokerage account that allows US dollars to be parked in the account and not immediately converted to Canadian dollars. That would defeat the whole purpose of NG. (I trust TD Waterhouse was the last brokerage to not have separate C$ and US$ accounts up until late 2017.)
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Canada
So with Horizon DLR's is it faster than using a typical stock? With a stock you have 2 days to settlement, 1 day to journal, 2 days to sell the stock on the US side.
I guess its cheaper if your broker doesn't charge for some ETF's but could this be one of them?
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I just start investing. Can someone break it down for me to se eif it's worth to use norbert's gambit with td?

Assuming I am transferring 50000, how much am I saving? Thanks.
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Valleywood
The big banks can be upwards of 2.5% (if not more) on US/CDN currency exchange. Converting $50,000 could cost $1,250.

BMO rates (right now) for US$ are 1.3247 (sell) or 1.3953 (buy). So C$50,000 would net US$35,834.

Using DLR.U ($10.11) and DLR ($13.75) the rate is 1.36. NG using C$50,000 would give US$36,763 less trading fees.

That would be a difference of US$929.
[OP]
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fastlayne wrote: The big banks can be upwards of 2.5% (if not more) on US/CDN currency exchange. Converting $50,000 could cost $1,250.

BMO rates (right now) for US$ are 1.3247 (sell) or 1.3953 (buy). So C$50,000 would net US$35,834.

Using DLR.U ($10.11) and DLR ($13.75) the rate is 1.36. NG using C$50,000 would give US$36,763 less trading fees.

That would be a difference of US$929.
And when you wish to convert back to Canadian, you will 'lose ' again because banks charge different buy and selling rates.

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