Writing puts in SMSF

[tetranomad]

Hi,

Does anyone know whether it is ok to write 100% cash-secured put options in an SMSF account? The broker (IB) allows writing puts in a Cash account up to 100% of the aggregate put strike price, which makes sense since that is the maximum loss. Is this ok from ATO's point of view, or is writing a naked put option considered borrowing by the ATO?

Thanks!

 

[Ardyne]

got a friend that does this. he owns the shares outright. over the last 12 months his super is up 17pcnt.

outside of smsf he and i borrow 100pcnt and buy a put. works great. loving this pullback.

 

[bongcso]

Hi,

Does anyone know whether it is ok to write 100% cash-secured put options in an SMSF account? The broker (IB) allows writing puts in a Cash account up to 100% of the aggregate put strike price, which makes sense since that is the maximum loss. Is this ok from ATO's point of view, or is writing a naked put option considered borrowing by the ATO?

Thanks!

I have been selling cash secured puts (and covered calls if puts get assigned) in my SMSF since Aug 2008. I have checked with my accountant and he has confirmed it is ok. There is also a doc on ASX written by a partner from Ernst and Young re tax treatment for options. It has temporarily been taken down for update but I have posted a copy on the resources page on my blog. Look around our blog if you are interested in more stock-options strategies.

Christina