Trading Foreign Stock Options from U.S.

You may be confused with the prohibition on companies not regulated in the US from taking U.S. customers?
 
NoVoodooHere said:
I recently found out that a person who is considered a U.S. resident is prohibited by U.S. law from trading options in a foreign jurisdiction.

...How is that freedom again?
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To trade listed options on a foreign exchange, you need a clearing a broker that can custody these trades and executing broker that can execute them. There is no reason why you can't do this at firms that have these capabilities.
 
I'd love sooo much to be wrong on this, or, "confused". In addition to needing a broker with the capabilities... You need to not reside in the U.S. (according to Uncle Sam). Of course you could just be a QIB, no biggie just have to own and invest on a discretionary basis at least 100 million dollars, peasants need not apply tho.

The issue is that the SEC (or maybe it's the CFTC, don't recall exactly) requires for foreign equity and index options products to be available to US residents the respective foreign exchanges where those products are traded have to register with the SEC. None of them have done that. Unconstitutional? Not directly, nobody is preventing you from buying/selling, they are just preventing the exchange from legally offering you the product.

This is all from IB, and once they did provide a link to the rules but I cannot for the life of me find any such source today on the internet. I re-contacted IB today and got the whole shpeal all over again.

I realize that presenting this w/out a link to rules does not come forth are genuine, but if you are interested in the subject and are an IB customer (or other broker w/ int'l capabilities) you can simply attempt to get set up to trade foreign options, see what happens.
 
Are you looking to trade options on index futures overseas? Maybe it would help if you are specific. What will IB NOT let you trade?
 
I believe you must be a QIB in the US to trade foreign share or index options. futures options are excluded from this restriction.
 
I could be wrong, but I know of no restriction or requirement like you mention. http://www.sec.gov/investor/pubs/ininvest.htm

Stocks Trading on Foreign Markets

If you want to buy or sell stock in a company that only trades on a foreign stock market, your broker may be able to process your order for you. These foreign companies do not file reports with the SEC, however, so you will need to do additional research to get the information you need to make an investment decision. Always make sure any broker you deal with is registered with the SEC. It is against the law for unregistered foreign brokers to call you and solicit your investment.
 
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