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Can I sell options in a retirement account?

Often, yes. Most brokers allow covered calls, and many allow cash-secured puts, inside an IRA, a Roth IRA, a TFSA or an RRSP. What they don't allow is margin, so every trade has to be fully covered. The exact list is your broker's, not the law's.

Options guide · 6-minute read · Updated 2026-10-26

The short answer

Yes, usually, for the two trades that make up the wheel strategy. A Covered call is allowed at almost every broker in almost every retirement account. A cash-secured put is allowed at many, but not all.

What you can't do in a retirement account is borrow. No margin, no naked calls, no selling more puts than you have cash for. That's a limit, and it's also the right way to sell options anyway.

The details are set by each broker, and they differ. Before you plan anything, ask yours one question: "Which option trades are approved in this account type?"

What's usually allowed, and what isn't

The cash-secured put row is the one to check. In Canada especially, some brokers allow puts in registered accounts and some don't, and the answer can differ between the TFSA and the RRSP at the same broker. See do I need the cash to sell a put? for why the cash must be there in full.

Why "no margin" is the rule

A retirement account can't carry a loan. That's a rule of the account, not the broker. So any trade that might need the broker to lend you money is out.

A covered call never needs a loan: the shares are already there. A cash-secured put never needs one: the cash is set aside. That's why these two pass and most others don't. It also means every put you sell is sized by cash you actually have, which removes the most common way sellers blow up.

A worked example (an illustration, not a trade idea)

Inside a retirement account you own 100 shares of a made-up stock, XYZ, bought at $50. You sell a 30-day $55 call for $1.00, collecting $100.

The account type changes nothing in that table. The shares fall the same way in an IRA as in a taxable account. What changes is how the result is taxed, and what you can do next.

The tax side, kept simple

In a US IRA or a Canadian TFSA or RRSP, premiums and gains aren't taxed year by year. There's no short-term capital gains bill on each expired call, which is one reason people like selling options there. In an RRSP and a traditional IRA, withdrawals are taxed later as income. In a Roth or a TFSA, qualified withdrawals aren't.

There's a flip side. A loss in a retirement account can't be used against gains elsewhere, and in a TFSA, lost room is gone. Tax rules change and your situation matters. This is general information, not tax advice, so talk to a tax professional before you lean on any of this.

Questions to ask your broker before the first trade

1. Which options approval level does this account have, and what does it allow?
2. Are cash-secured puts permitted in this account type?
3. If I'm assigned shares, is there a fee, and does the account have enough cash to settle?
4. Can I roll a position, or do I need to close and reopen?
5. Does the app show my set-aside cash separately from my free cash?

Write the answers down. If you can't get a straight answer, that's a signal too. Then decide which side to start on: covered calls or puts?

The Assignment risk and the capped upside stay the same in every account type. Read what's the catch with selling options? if you haven't yet.

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