Options Friendly IRA Custodians

[Mister Imperceptible]

I will need to set up a SEP IRA by the April 15 deadline. Does anyone have good experiences with certain custodians regarding options? I have been reading that some put limitations on options trading within retirement accounts. I have a Roth IRA with Fidelity that is 100% in equities, but as that money has already been taxed, I want to experiment with options using pre-tax dollars (at first), so if the outcome is unfavorable, it at least reduces my tax liabilities long term. I have also read that the custodians like to see experience with options trading, but I’m not buying that. I’m a customer, I should be able to do what I want.

[Chris]

I had no problem opening a SEP with my regular broker. Trading acts just like an individual trading account, including options. As with a standard account, I did need to have the account authorized for options trading, but it was all online and immediate.

[jacob]

You can do what you want as a customer, but while you're an equity or bond customer, you're not an options customer yet

If it's anything like it was 10+ years ago, you have to read and sign a 30 page document mostly to the effect that you know what you're doing(*). (What's the difference between a put and a call? what does writing mean?). It's easier to get approved for simple stuff (less risk) first such as long calls and covered calls which you can do without a margin account(**). Once you've done that for a while, you can upgrade to naked short puts, etc. If it's a fancy operation, they might offer straddles (in the form of single trades) as well---more approval.

(*) This is to protect both you and them (being the middle-man between the market+regulations and your potential screw-ups).

(**) This might very well be why some kinds of options trading is limited in your retirement accounts. See random link: https://pocketsense.com/can-trade-margin-ira-1563.html

[Mister Imperceptible]

I’m leaning toward the T-Bill/option strategy, so no margin should be needed (if I understand correctly). I suppose I could always switch custodians and transfer the funds if I find myself overly limited. I just need to set one up and take the tax deduction. The funds should sit in a Treasury money market account until I’ve properly educated myself.

[eudaimonia]

I had no issues setting up a Roth IRA with TD Ameritrade (Think-or-swim). Very easy setup and options friendly. You just have to fill out a short questionnaire and confirm you have experience trading options (Tier III).