Chapter 25: Canadian Tax Aspects of Listed Options Trading

In this section

• Professional vs. Non-Professional Option Traders
  Discover how the CRA classifies Canadian options traders, the differences between business income and capital gains treatment, recordkeeping strategies, and practical tips for compliance.
• Federal Tax Consequences for Non-Professional Traders
  Explore how Canadian federal tax rules generally apply to retail investors and casual traders when buying, selling, or writing listed options, focusing on capital gains treatment, Adjusted Cost Base, superficial loss rules, and essential recordkeeping.
• Federal Tax Consequences for Professional Traders
  Discover how option trades are classified as business income vs. capital gains in Canada, along with tax implications and deductions available to professional traders.
• Tax Consequences for LEAPS® Investors
  Explore Canadian tax implications of LEAPS® options, covering capital vs. business income considerations, adjustments to ACB, and best practices under CIRO guidance.
• Allowable Use of Exchange-Traded Options in RRSPs, RRIFs, and RESPs
  Explore how exchange-traded options fit within Canadian tax-advantaged accounts, focusing on key regulations, tax benefits, and strategies. Learn about covered calls, permissible option trades, and how these accounts affect taxation on gains.
• Recent CRA Interpretations on Derivatives
  Explore how the Canada Revenue Agency's interpretations on derivatives—especially options—can influence tax treatment, ACB adjustments, hedging rules, and cross-border reporting obligations. Learn about short-term weekly options, mini-options, and crypto-linked ETFs in this comprehensive look at evolving CRA guidance.
• Tax Implications of Derivative Overlays in Balanced/Equity Portfolios
  Explore the complexities of Canadian tax treatment for derivative overlay strategies in balanced or equity portfolios, balancing hedging vs. speculation, and critical CRA reporting considerations.
• Tracking Adjusted Cost Base (ACB) in Complex Strategies
  Learn essential techniques and best practices for correctly tracking your Adjusted Cost Base (ACB) across diverse and complex derivative strategies, including exercise, assignment, and rolling scenarios.