A stock option is a contract that gives the buyer the right – but not the obligation – to buy or sell a stock at a specific price on or before a certain date. You don’t have to invest directly in the stock.
TFSA Investment Options
You can just buy the option. Call options give you the right to buy a stock at a certain price by a certain date.
Stop using your TFSA to frequently trade stocks — the CRA may see it as taxable business income
Put options give you the right to sell a stock at a certain price by a certain date. Stock options are complex investments, so ensure you understand how they work before you invest.
Learn more about stock options.
The Canada Revenue Agency (CRA) has information on qualified investments for registered plans. The CRA is the regulatory body in Canada that implements and enforces rules related to registered plans, such as TFSAs.
Generally securities purchased for registered plans like TFSAs must be purchased through a designated stock exchange. For more information on qualified listed securities, visit the CRA’s website.