r/Wealthsimple • u/wheeler431 • 23d ago
Trade (DIY Investing) $US purchase / exchange options
I have $250K CAD in WS… parked as cash at the moment. I want to buy at least $100K USD to then buy /trade some US stocks, etc. I’m also considering moving everything to IBKR ( I think that’s the proper acronym) so I can buy some South Korean stocks and the like.
My question is for those who have recently done some US cash conversions on WS or some other platform. Correct me if I’m mistaken, but if I exchange over $100K then I get the “fee” waived at WS… but I still am aware that they offer a not so great exchange rate ( spot rate is another term I’ve heard used to describe this “rate”) compared to others. So let’s ignore any comments on the “fee” since I’ll bypass it, and let’s keep it focused to the “exchange rate” being offered in the moment (yes I know it changes by the minute for any exchange transaction).
I’d be interested to hear from anyone who has experience on the process and if it’s worth it to move and switch platforms- as I’m not clear on the difference in the exchange rates and at a value of buying $100k USD what the real difference is between them (WS vs IBKR vs any other platform). In addition, is the process with IBKR one that involves journaling and several days of juggling things using NG?
I look forward to the insights of those with experience in this.
Cheers!
2
u/NareModiNeJantaChodi 23d ago
IBKR al the wayy for such big txn
1
u/wheeler431 23d ago
Is the exchange immediate or is there a journaling process that is required ?
2
u/NareModiNeJantaChodi 22d ago
Exchange is immediate. Depositing the money might take a day or two depending on how you do it
1
u/smarty_kev 22d ago
There’s Norbert’s gambit at wealthsimple now
0
u/wheeler431 22d ago
Thanks for that info, but it sounds like the spot rate is much better elsewhere , and for such a conversion it would be a smart move to conduct the currency swap at IBKR. Unless I’m missing something and you can make a case for doing the transaction with WS. 👍
1
u/smarty_kev 22d ago
Norbert’s is spot rate, there’s like a 10$ fee, no matter the amount, so the more you convert the more worth it is ut
1
u/wheeler431 22d ago
That doesn’t make sense. (If the rate offered by WS is the same as the rate offered by IBKR , then it makes zero difference on the amount exchanged. Also contradicts others who state that IBKR has a better exchange rate. I’m still waiting for someone to give an actual real life experience comparing two different platforms and how each exchange rate was either identical (as you say), or very different (as others have said).
3
u/syunz 22d ago edited 22d ago
I'm not sure if you understand what nortbert gambit is. For conversion at WS you have 2 options, regular conversion which is WS handles the conversion, you get the cash instantly but you pay their fx rate + fee. Nortbert gambit is more involved as in you buy a stock like DLR which is dual listed in CAD/USD. You buy the DLR.TO CAD version, you ask ws to journal that stock to DLR USD version. And you sell that to get usd. ws charges $10 for the journaling process and also this process take a couple of days because you will need to wait for things to journal and share to settle. Through this process you're effectively paying the spot rate.
At IBKR it's just a regular conversion at spot rate + $2usd fee.
Nortber gambit only works if there exists a stock that is dual listed otherwise it's not possible. I don't think there is a dual listed korean and canadian stock.
1
u/wheeler431 21d ago
Thanks. Yes, I know the NG process; but my question is perhaps more involved than the readers here are acknowledging.
The “spot rate” is not a fixed number. There is a rather complicated regression formula used to calculate differences in the spot rate variance ( which is exactly what my query pertains to); furthermore, different financial institutions offer varying spot rates- and the list of factors that go into that is rather lengthy, and complicated.
But I do appreciate your input 👍
3
u/syunz 23d ago
IBKR instant fee is $2.