Norbert's gambit calculator: the cost vs your broker's exchange rate
Your broker's exchange rate hides a cost in every US dollar. Norbert's gambit swaps it for two commissions. Put in your own prices and fees, and see which one costs less, and from what amount.
| Amount (C$) | Broker's rate costs | Gambit costs | Gambit saves |
|---|
How it works: your broker's rate costs the amount × its exchange cost %. The gambit buys as many whole DLR shares as the amount covers after the buy commission and journal fee, then sells them as DLR.U for US dollars. Its cost = the commissions and fee + the price gap, which is each share's C$ price minus its US$ price × today's rate. Any change too small for one more share stays in Canadian dollars; it is not a cost. Break-even is the amount where both cost the same. The all-in rate is the C$ you spent for each US$ you got.
Why the gambit loses on small amounts
Your broker's exchange cost grows with every dollar. The gambit's cost is mostly fixed: two commissions, no matter the size. So on C$1,000, two C$10 commissions cost more than a 1.5% spread. On C$20,000 they are tiny next to it. That's why the default above loses and the table shows the turn. If your broker charges no commission on ETF trades, the gambit wins at almost any size. The steps, the wait, and the mistakes that undo it are in Norbert's gambit before selling US options.
Why option sellers care
A cash-secured put on a US stock needs the strike × 100 in US dollars. A US$50 put ties up US$5,000. At C$1.40 per US$1 that is C$7,000, and a 1.5% exchange cost takes about C$105 before you sell a single contract, and the same again if you ever convert back. On a small premium, that eats a big bite. If you plan to run the wheel strategy on US stocks for years, convert once, keep the US dollars in the account, and let premiums arrive in US dollars too. While DLR settles and journals, usually one to three business days, your money still moves with the exchange rate.
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