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Looking for clarification about options trading on RBC Direct Investing (Canada)

Main Post:

For those that trade options using RBC Direct Investing, I have a couple questions about what you can do on DI.

I’m thinking of starting options trading and was going to open an options account (not with margin) with DI since I bank with RBC and this was what it said in their options order FAQ:

  • can buy calls and puts
  • can only sell covered calls
  • for buys, you must ensure that there is sufficient cash in your account
  • spreads are not permitted

(https://www6.royalbank.com/en/di/reference/article/options-order-entry-faqs/iu8fhp3t)

My option strategy is going to be to buy call options and sell the contract only. I have no intention of exercising, ever. So I have a couple of questions after reading that FAQ:

  1. By “enough cash to buy”, do they mean enough cash to buy the option premium or enough cash to cover the potential exercising of the option at the time of the buy?
  2. If you can only sell covered calls, that means I can’t just sell a call option I bought previously? I have to exercise it first AND THEN sell it? Sorry if it’s obvious but it doesn’t make sense that I can’t just sell a contract I no longer want to exercise.
  3. Since spreads are not permitted, this means I can’t buy several call options of the same stock at different strike prices / expiry dates?

Thanks everyone for their help! Also sorry if this was supposed to go under the weekly thread, very new to this sub.

Top Comment:

First of all if you are doing this in an RRSP or TFSA you will never be allowed to trade more than this due to Canadian government restrictions. You can still smartly invest just you have to be aware of limitations.

  1. They mean enough cash to buy the option contract. Nothing will be exercised since you cannot sell puts/calls and you often will never exercise it as you will lose premium and it is not worth it.
  2. It means you can't sell the call contract. When you "sell/write a call" it means you agree to sell 100 shares of that stock if the owner of the contract exercises it. You can still buy a call watch the stock go up and sell the contract for a profit.
  3. Spreads mean things such as vertical spreads where you buy and sell a call on same date at different strikes.

I also have experience with TD and RBC, if you wish to have more privliges such as trading spreads and selling calls (more risky) you MUST open a margin account. This is with every bank you will run to in Canada.

I fully recommend opening up an account with Interactive Brokers and reducing your commissions.

Also you seem to be confused on the difference between selling and buying options and other strategies, please make sure you inform a little more via resources such as TastyTrade or Natenburg books, if you do open a margin account.

Forum: r/options

Direct Messages from the Trade Site now has linked items. Your last whispered item is highlighted in the stash. What if, when you click on the linked item, and it highlights in your stash?

Main Post:

Solves the multiple whisper problem.

Direct Messages from the Trade Site now has linked items. Your last whispered item is highlighted in the stash. What if, when you click on the linked item, and it highlights in your stash?

Top Comment:

I will take anything that streamlines trading. What I really want is my stash to open to the relevant tab.

Forum: r/pathofexile

Direct Whisper from Trade site also works on your Mobile phones.

Main Post:

I recently discovered that you can use Direct Whisper from your Mobile phone's browser.

Good for those that do not want to switch screens when trading or to rest your hands from scrolling.

Apologies but this might be already widely known already by the sub but for those that don't hope it helps.

Top Comment:

It also works on your friends computers where you are still logged in from the time you visited him a few weeks ago.

Forum: r/pathofexile

can clients trade foreign stocks in RBC Direct Investing accounts? : rbc

Main Post: can clients trade foreign stocks in RBC Direct Investing accounts? : rbc

Forum: r/rbc