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Strategies & Market Trends : Roth IRA ideas
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To: Trevor Goodchild who wrote (109)4/24/1998 10:10:00 PM
From: Howard R. Hansen  Read Replies (1) of 388
 
My basis for saying you can trade Level 1 and 2 options in an IRA comes from a "Fidelity Brokerage Account For IRAs and Keoghs" account information data sheet dated 12-1-97. In there it says "Fidelity Brokerage IRAs and Keoghs are restricted to options levels 1 and 2". This sentence was part of a table that listed the commission schedule for options.

Also according to Publication 590 Individual Retirement Arrangements some examples of prohibited transactions within an IRA are:
1) Borrowing money from it.
2) Selling property to it.
3) Receiving unreasonable compensation for managing it.
4) Using it as a security for a loan.
5) Buying property for personal use (present or future) with IRA
funds.

Item 4 prohibits one from using margin to buy securities or options. However, I don't see how any of the items listed above prohibit one from selling covered calls or buying calls and puts.
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