Home › Guides › Options: Canada

Norbert's gambit: getting US dollars before you sell US puts

A cash-secured put on a US stock needs the full strike in US dollars. Norbert's gambit gets you those dollars for much less than a broker's exchange rate, once the amount is big enough. Here are the steps and the math.

Options guide · 8-minute read · Updated 2026-10-28

The short answer

Norbert's gambit is a way to swap Canadian dollars for US dollars using an ETF instead of your broker's exchange desk. You buy a US-dollar ETF in Canadian dollars, ask your broker to move it to its US-dollar listing, then sell it for US dollars.

The cost is two trade commissions, a small bid-ask gap, and at some brokers a journal fee. A broker's exchange rate hides a spread on every dollar. So on a big amount, the gambit costs far less. On a small one, it can cost more.

Option sellers need it more than most. A cash-secured put on a US stock locks the full strike × 100 in US cash. Converting that at a poor rate, then back again later, eats into a premium that was small to begin with.

Why option sellers need US dollars

US options are priced and settled in US dollars. So:

• A $50 put needs US$5,000 set aside.
• The premium arrives in US dollars.
• If you're assigned, the shares are bought in US dollars.

If your account holds only Canadian dollars, the broker converts for you at its own rate. In a regular margin account, some brokers lend you the US dollars instead, and charge interest. A TFSA or RRSP can't borrow, so there the cash has to be converted and sitting in the account.

You can run the wheel strategy on US stocks for years and never convert back. Then the gambit is a one-time cost. Or you can convert in and out every few months, and pay the spread every time. Plan which one you are.

The steps

The ETF most Canadians use is DLR, a US-dollar ETF on the Toronto exchange. It trades in Canadian dollars as DLR and in US dollars as DLR.U. Both are the same fund.

1. Buy DLR in Canadian dollars, in the account that will sell the puts.
2. Ask your broker to journal it to DLR.U. Some brokers do this online. Some need a phone call or a message. Some charge for it: as of October 2026, Wealthsimple and Questrade each list a $9.95 fee per journal request.
3. Wait for the buy to settle and the journal to go through. As of October 2026, Canadian trades settle one business day after the trade. The journal can add a day or more.
4. Sell DLR.U. You now hold US dollars.
5. Sell your put. The US cash covers the strike.

Each broker handles step 2 differently. Check your broker's help page for "Norbert's gambit" or "journal DLR".

Is it worth it? (an illustration, not a trade idea)

All numbers are hypothetical. Say your broker's exchange rate costs you 1.5% of the amount. Say each trade costs $10. Say the DLR bid-ask gap costs about 0.1% of the amount. Say there's no journal fee.

At $1,000, the gambit loses: two $10 commissions cost more than the spread. The break-even here sits just above $1,400. Above it, the savings grow with every dollar.

Put your own broker's rate, fees and gap into our Norbert's gambit calculator to find your break-even. If your broker charges no commission on ETF trades, the break-even is much lower. A journal fee pushes it higher.

How it fits a US put

Say you want to sell one put on a made-up US stock, XYZ, at a $50 strike (hypothetical). You need US$5,000.

At a hypothetical rate of 1.40 Canadian dollars per US dollar, that's about $7,000 CAD. Converting through the broker at a 1.5% cost: about $105. Through the gambit at the costs above: about $27.

Say the put collects US$100, about $140 CAD. Through the broker, the conversion ate about three-quarters of that premium. And if you convert back later at the same rate, you pay again.

Now the bad case. XYZ drops to $40 and you're assigned. You own US$5,000 of shares worth US$4,000. You're down −$900 US after the premium. A cheaper conversion doesn't change that. It only stops the currency step from adding to it.

Mistakes to avoid

• Doing the gambit for a small amount. Below your break-even, the broker's rate is cheaper.
• Doing it in the wrong account. Buy DLR in the account that will sell the put. Moving cash between accounts later can mean another conversion.
• Selling DLR before the journal is done. You'll sell it in Canadian dollars and undo the whole thing.
• Forgetting the tax side. In a regular account, you bought and sold an ETF. That's a small capital gain or loss to report, in Canadian dollars. Every US premium also has to be reported in Canadian dollars. See converting US option premiums to CAD for tax.
• Assuming your TFSA can hold US dollars. Not every broker's TFSA can. Check yours first. See brokers that allow cash-secured puts in a TFSA.

For the rest of the Canadian setup, see selling options in Canada. The US-vs-Canadian-options choice is there too: Canadian options skip this step entirely.

Questions