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Are you allowed to trade options in a Roth IRA? Or is a Roth IRA limited to stocks, bonds, and mutual funds? Thanks!
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You can trade options in a Roth IRA if your custodian say you can; however, you cannnot in any form use margin.
If your custodian allows it, you can buy options, sell covered calls, and sell a put as long as there is cash in the account to cover an exercise. If you own an option you can sell it, but you cannot sell a naked call. Similarly you cannot short a stock in an IRA.
Some custodians will not allow option trading at all, but that is the custodian's choice not a federal regulation pertaining to IRAs.
Best wishes, Chris
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IMHO, options in an IRA are not a very Foolish choice.
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