Home › Guides › Options: Canada

Can you sell covered calls in a LIRA?

Yes, at many brokers. A covered call is backed by shares you already own, so a LIRA can usually hold one. Cash-secured puts are another story, and that's mostly down to the broker.

Options guide · 8-minute read · Updated 2026-10-28

The short answer

You can usually sell a Covered call in a LIRA, if your broker offers options in that account. The call is backed by 100 shares sitting in the LIRA. If it's exercised, the shares go out and cash comes in. The money never leaves the account, and nothing is borrowed.

A Cash-secured put is allowed at fewer brokers. Naked options are never allowed. A LIRA can't borrow.

This page is part of my map of selling options in Canada. For every registered account side by side, see options rules for each account.

What a LIRA is, in plain words

A LIRA is a locked-in retirement account. It holds pension money you moved out of a work pension plan, usually after you left that job. In Quebec it's called a CRI.

Three things make it different from an RRSP:

1. You can't add money. It only takes transfers from pension plans or other locked-in accounts. What you lose can't be topped up.
2. You can't take money out, except in narrow cases, until you turn it into a retirement income account, like a LIF.
3. Pension law sits on top of the tax rules. Which law depends on where the pension came from: a province, or the federal government.

The tax side works like an RRSP. Nothing is taxed while the money stays in. Losses can't be claimed.

Why covered calls fit, and puts often don't

Brokers ask one question about any option you sell: can you keep the promise?

• A covered call. The shares are already there. If the call is exercised, they're sold at the strike. The broker doesn't have to lock up anything new.
• A cash-secured put. The full strike × 100 must sit in cash, locked, until the put ends. Brokers need a system to hold that cash in each account type. Many built it for TFSAs and RRSPs first. Locked-in accounts often come last.

As of October 2026, some brokers allow cash-secured puts in a LIRA. Many keep it to covered calls and buying options. Broker rules change, so check your broker's help page for locked-in accounts. That means the wheel strategy often can't run in full here. You can sell calls on shares you hold. You may not be able to sell the put that buys them.

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

Your LIRA holds 100 shares of a made-up stock, XYZ. You bought them at $60, so they're worth $6,000.

You sell one call with a $65 strike, about 45 days out, for $1.20. You collect $120, and it stays in the LIRA.

The worst row is the one to read twice. If XYZ falls to $45, the premium covers $120 of a $1,500 drop. You're down $1,380.

In a regular account, that loss could offset a gain somewhere else. In a TFSA, you could at least add new money with next year's room. In a LIRA, neither happens. The money is gone from the account, and you can't put more in.

What being called away means in a LIRA

If XYZ ends above $65, your shares are sold at $65. You get $6,500 in cash, plus the $120 you already had. All of it stays in the LIRA.

Nothing is taxed. Nothing comes out. You just hold cash instead of shares, and you choose what to buy next. That's the main reason covered calls suit this account: the outcome you might not want is "you sold at a gain."

The catch is the gains you give up. If XYZ runs to $75, a plain holder is up $1,500. You're up $620. In an account you can't add to, that missed growth is also gone for good.

Before you sell your first call in a LIRA

1. Ask your broker if the LIRA supports options, and at what level. Many brokers set registered accounts to a basic level: covered calls and buying options.
2. Ask about US dollars. Options on US stocks are priced in USD. Some brokers let a LIRA hold USD. Some convert every trade.
3. Check your dates. A LIRA is often turned into a LIF later. A LIF has a minimum withdrawal each year, and in most provinces a maximum too. Shares tied up under a call can make that harder to plan. See covered calls in a RRIF for how that works.
4. Pick strikes above what you paid. A strike below your cost locks in a loss if you're called away.
5. Size it as if there were no option. The shares carry the risk. The premium is a small cushion.

Covered calls are widely allowed in a TFSA and RRSP too, and cash-secured puts there depend on the broker. Options permissions differ by broker and by account.

Questions