Where to trade Canadian options?

R

rayden

Hello, I'm in the US and I'd like to trade Canadian options, specifically options on stocks listed on the TSX. Any ideas which broker will let me do that?

I currently have an IB account and I've been unable to get a straight answer from them whether I can do that, although it seems I can't. They pointed me to this page: http://www.interactivebrokers.com/en/trading/eligibleProducts.php?ib_entity=llc
which says... "Because of SEC restrictions, US legal resident customers cannot trade US stock and equity index options outside of the US. In addition, the CFTC must explicitly approve any non-US futures or options on futures contract for trading by US resident customers."

Does that mean legal residents cannot trade but citizens can, or any legal residents (including citizens) can't?

Does that mean cannot trade options on US stocks in a foreign exchange, but can trade options on foreign stocks? Or cannot trade options in a foreign exchange period? What about stocks which are dual-listed? (or regularly listed there and listed as pink sheets here) If one *can* trade options on foreign-only stocks, is the reason IB is blocking the entire exchange just because some stocks are double-listed?

I would really like to be able to do this, since I've done very well with TXS stocks, and a little bit of options will just give me more leverage. Any ideas anyone?
 
Why don’t you just apply with IB for trading permission on the Montreal Exchange? You should be eligible to trade SXF index futures and SXO future options. Maybe they make a mistake and you will be able to trade stock options as well.

Regardless of above, you should be able to trade options of Canadian companies listed on US-option exchanges. IB has over 100 listed here:
http://www.interactivebrokers.co.uk...&contract_type=OPTGRP&country=CA&currency=USD
Pros: Commissions for options traded in US are lower!
Cons: Restrictions associated with US options (e.g. order cancellation fees, orders on one side of the market, …).
 
Quote from HOBO:

Why don’t you just apply with IB for trading permission on the Montreal Exchange?
More...

Hmm, I don't see that as an option anywhere in my trading permissions screen.

Yes, some companies I'm interested in are dual listed as pink sheets, but there are no US options chains on those. Most of the ones I'm interested in are not dual-listed at all.

Can anyone clarify what the SEC rule actually disallows?
 
Quote from rayden:

Hello, I'm in the US and I'd like to trade Canadian options, specifically options on stocks listed on the TSX. Any ideas which broker will let me do that?

I currently have an IB account and I've been unable to get a straight answer from them whether I can do that, although it seems I can't. They pointed me to this page: http://www.interactivebrokers.com/en/trading/eligibleProducts.php?ib_entity=llc
which says... "Because of SEC restrictions, US legal resident customers cannot trade US stock and equity index options outside of the US. In addition, the CFTC must explicitly approve any non-US futures or options on futures contract for trading by US resident customers."

Does that mean legal residents cannot trade but citizens can, or any legal residents (including citizens) can't?

Does that mean cannot trade options on US stocks in a foreign exchange, but can trade options on foreign stocks? Or cannot trade options in a foreign exchange period? What about stocks which are dual-listed? (or regularly listed there and listed as pink sheets here) If one *can* trade options on foreign-only stocks, is the reason IB is blocking the entire exchange just because some stocks are double-listed?

I would really like to be able to do this, since I've done very well with TXS stocks, and a little bit of options will just give me more leverage. Any ideas anyone?
More...

Hi Rayden. Before you start to trade Cdn options, you should be aware that Cdn options lack the liquidity which U.S. options have. Most of the time you will be buying from or selling to a market maker and the spreads are typically quite wide ($0.25).
All option trading in Canada is conducted through the Montreal exchange.

As for the U.S. rules on this, I can't help you with that. Just something to consider before you start down this road.
 
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