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The speaker was absolutely wrong. Leaps are options in every aspect. However
options can be done in IRA's. The only issue with using options is the use of
leverage. So if a call is bought in an IRA ... the money market in the IRA must
have the full strike on deposit. Puts can be bought one for one with the
underlying, puts can be sold must be fully secured. Having said all of that a
brokerage firm may not chose to do the business .. so you simply may need to
find one that allows it. Very few allow any strategy other than covered call
writing without a specific exemption from their Senior Register Options
Principal so most brokers just say they don't allow it.
Some of the firms that allow it are Brown and Co, SalomSmithBarney, PaineWebber
as well as some of the option boutiques like Ben and Jerry's ... PTI, etc.
Almost all of the boutiques allow it. Fidelity simply won't do it and Schwab
will if you get to the right person in San Francisco. In short you may have to
shop brokers to find one that will allow it,
SPhill1067@xxxxxxx wrote:
> At a presentation about options the speaker was asked whether option
> strategies could be used in am IRA. My experience is that only call writing
> is permitted. Otherwise options can be traded only in a "self-directed" IRA
> through a trust such as Intrust (Independent Trust Corporation). The
> speaker said that options strategies can be done thru some brokers using
> LEAPS, because LEAPS are not considered options under certain conditions.
> Does anyone know anything about this?
>
> Thanks
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