Norbert'sGambit.ca

Norbert's Gambit USD to CAD: The Reverse, and Its Extra Risk

MTLast reviewed June 2026 by Mike Taylor, Canadian financial writer. Fact-checked

To convert U.S. dollars to Canadian dollars with Norbert's Gambit, you run the steps in reverse: buy DLR.U with your U.S. dollars, journal it to the DLR side, then sell DLR for Canadian dollars. It works the same way as the usual direction, but it carries more exchange-rate risk, because you stay exposed to a falling U.S. dollar for the few days the shares are in transit. That extra risk is the one thing to understand before you do it.

This page covers the reverse steps, why the risk is higher, and how to reduce it. For the standard CAD-to-USD method, see the step-by-step guide.

The reverse steps

  1. Buy DLR.U. On the U.S.-dollar side of your account, buy DLR.U with the U.S. dollars you want to convert. Use a limit order.
  2. Journal to DLR. Ask your broker to journal the shares from DLR.U to DLR, or let it happen automatically if your broker does that. The same number of units now sits on the Canadian-dollar side.
  3. Sell DLR. Sell DLR on the Toronto Stock Exchange. The proceeds land as Canadian dollars.

Mechanically, that is the whole thing. It is the mirror image of converting Canadian dollars to U.S. dollars.

Why the reverse carries more risk

The risk comes from which leg is fixed and which one floats while you wait.

When you convert Canadian dollars to U.S. dollars, you end up holding DLR.U, the U.S.-dollar version, during the settlement and journaling period. DLR.U tracks U.S. cash, so in U.S.-dollar terms its value barely moves. You are parked in the currency you are converting into, which is exactly where you want to be.

When you go the other way, you hold DLR, the Canadian-dollar version, while you wait. But your goal is Canadian dollars, and the value of what you are holding still depends on the U.S.-to-Canadian exchange rate until you sell. If the U.S. dollar weakens against the Canadian dollar during those few days, you receive fewer Canadian dollars at the end than you expected. You are exposed to the rate moving against you for the whole waiting period.

On a stable few days the difference is tiny. But exchange rates can move a percent or more in a short stretch, and that swing can be larger than the fee you were trying to save. That is the trade-off of the reverse gambit.

How to reduce the risk

When the reverse gambit makes sense

It still saves real money on larger amounts, the same as the forward direction. A freelancer or business owner paid in U.S. dollars, for example, who needs to move several thousand dollars into Canadian dollars, can save the 1.5% to 3% a bank or broker would charge. The key is to accept the short exposure window, use a fast-journaling broker, and not do it with money you cannot afford to see swing by a percent or so over a few days.

For amounts under about $1,000, the reverse gambit usually is not worth the effort or the rate risk. See is it worth it for the break-even math.

Frequently asked questions

How do I convert USD to CAD with Norbert's Gambit? Buy DLR.U on the U.S.-dollar side, journal it to DLR, then sell DLR for Canadian dollars.

Why is USD to CAD riskier than CAD to USD? Because you hold the Canadian-dollar version, DLR, while you wait, and its value depends on the exchange rate until you sell. If the U.S. dollar weakens during the settlement period, you get fewer Canadian dollars.

How can I reduce the risk? Use a broker that journals quickly or automatically, avoid volatile days, and consider whether the saving justifies the short exposure for your amount.

Is the reverse gambit still cheaper than my bank? On larger amounts, usually yes. It avoids the 1.5% to 3% markup, though you take on a few days of exchange-rate risk in return.

Sources

This article is general information, not financial advice. Exchange rates move. Confirm your broker's process and consider the rate risk before you convert.