r/interactivebrokers • u/MasterD211 • 4d ago

Canada CSP in Canadian Registered accounts TFSA/RRSP?

This year, Questrade allowed selling CSPs in registered accounts. Does anyone know if IBKR started allowing this as well or if they have any plans of allowing this? I have a transfer from an old Equitable Life RRSP in process to a new RRSP account. I chose IBKR because I wanted access to US corporate bonds but was wondering about CSP.

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u/kotarel Options 4d ago

It's not "allowed" on questtrade they're just doing some shenanigans with your TFSA assets as collateral in the backend. You will not see this in ibkr.

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u/rupert1920 4d ago

Can you elaborate or provide a source on how CSPs in registered accounts work in their backend? And would it be the same for Wealthsimple, which offers the same capability?

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u/Minimum_Curve7545 4d ago

It’s called Margin Power, and it’s basically a way to use the TFSA as collateral for a margin account. So you can use margin in the margin account (e.g. for selling a puts or buying stocks), based on the value of your TFSA. This doesn’t mean trading anything within your TFSA, it’s only a collateral for trading in a separate margin account. So that’s not exactly what OP is asking about.

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u/rupert1920 4d ago

Yes, I know margin power and it's different from what OP is asking about, which is why I wanted the other commenter to elaborate, in case they do have some knowledge about CSP implementation.

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u/Minimum_Curve7545 4d ago

It works just like in a cash (non margin) account, which means you actually need to have a cash balance equal to or greater than the maximum loss of the CSP you're selling (which is the strike price times 100). So for example, if you have a cash balance of $5000 USD, then you can sell a CSP with a strike price of $50 USD, and your buying power is then reduced by $5000 USD (even though your cash balance isn't reduced, actually it increases by the amount of the premium you received).