Can I sell options (covered call and cash-secured put ) inside the RRSP account and is there any meaningful limitation on numbers of trades, volume or frequency?
Option Trading in RRSP accounts
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Hi Sergey,
In general, an RRSP can hold certain option strategies, but there are important limits.
A covered call is generally viewed as more acceptable inside an RRSP where the plan already owns the underlying securities. CRA has indicated that writing a covered call, by itself, does not automatically mean the RRSP is carrying on a business.
A cash-secured put is more problematic. CRA has stated that writing a put option may, depending on the facts, cause the RRSP to be considered to be carrying on a business. In addition, registered plans are generally prohibited from borrowing, and option strategies can create issues if the account could require borrowing or otherwise go offside.
With respect to the number of trades, volume, or frequency, there is no simple published numerical limit. The risk is not based on a specific trade count, but rather on the overall facts and whether the activity starts to look like a business or active trading operation. CRA’s position is fact-specific.
You should also confirm what your brokerage permits, since some RRSP issuers restrict option trading beyond what may be technically allowed under tax rules.
Best,
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