Guide to Canada Option Trading – Optrader.ca
Guide to Canada Option Trading – Covered Calls, TSX Tips & More
Whether you’re just getting started or looking to sharpen your strategy, this guide walks you through how option trading works in Canada. From covered calls on TSX stocks to cash-secured puts, we cover the essentials for any Canadian options trader.
🇨🇦 What Are Options in Canada?
Options are contracts that give you the right (but not obligation) to buy or sell a stock at a specific price before a specific date. In Canada, most options trading occurs on the TMX Group (TSX) or via U.S. markets like NYSE/NASDAQ.
- Call Option – Bet the stock will go up
- Put Option – Bet the stock will go down or collect premium
💡 Covered Calls: Canada’s Most Popular Option Strategy
Covered calls involve owning a stock and selling a call option against it to generate premium income. This is ideal for Canadian investors in flat or mildly bullish markets. For a complete walkthrough, check out our Covered Call Strategy Canada Guide.
💰 Cash-Secured Puts Explained
This strategy involves selling a put option while holding enough cash to buy the stock if assigned. It’s useful for buying quality stocks at a discount and collecting upfront income.
🧮 Tax Tips for Canadian Option Traders
- TFSA/RRSP Friendly: Option income is tax-free in TFSA and tax-deferred in RRSP.
- Outside registered accounts: Options premiums may be taxed as capital gains or business income.
- Speak with a CPA familiar with CRA option taxation for large accounts.
📈 Canada vs U.S. Option Trading
- TSX options: Fewer symbols, lower liquidity, CAD-denominated
- U.S. options: Greater choice, but must convert currency
- Best practice: Use TSX for TFSA and RRSP, U.S. for margin accounts
⚙️ Best Tools for Option Screening in Canada
Optrader.ca offers a screener built specifically for Canadian traders, supporting:
- 📊 ROO % (Return on Option)
- 📅 Earnings filters
- 💬 News sentiment and AI models
- 📄 PDF export for tracking covered calls
- 🔍 Liquidity + premium outlier detection
