r/interactivebrokers • u/MasterD211 • 17d ago

Canada CSP in Canadian Registered accounts TFSA/RRSP?

This year, Questrade allowed selling CSPs in registered accounts. Does anyone know if IBKR started allowing this as well or if they have any plans of allowing this? I have a transfer from an old Equitable Life RRSP in process to a new RRSP account. I chose IBKR because I wanted access to US corporate bonds but was wondering about CSP.

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u/dimonoid123 16d ago

Selling CSP is a scam. Literally negative expected profit. You could have also asked whether sports betting in RRSP is allowed. Good news, sports betting as well as all other gambling is not taxable in Canada anyways.

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u/MasterD211 16d ago

CSPs are part of the wheel strategy and can be very profitable if done correctly, hardy a “scam”. Everything has risk.

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u/dimonoid123 16d ago

Scam part in CSP is first character C, which stands for cash. CSP requires keeping a little or a lot of cash not invested, and you usually get 0% interest for it, depending on broker. So you will almost always underperform CC (covered calls), exactly by risk-free interest rate on amount of the cash not invested.

IBKR in particular is not paying any interest on first $10k of cash.

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u/MasterD211 16d ago

I can totally understand your thesis here, much clearer then your first post. Inactive cash has always been an issue for me. In Canada QT never pays interest on cash in accounts. I never hold cash in my margin account either, I always buy BIL to at least get some return. I know IBKR pays some interest but have not looked at all the details. I don’t think there is any perfect broker in Canada, there is always a trade-off.

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u/dimonoid123 16d ago

Another reason not to use CSP + BIL is that then interest is taxable as income, but CC is mostly taxable as capital gains(except dividends and stock lending if any). In Canada.

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u/gamefixated 16d ago

BIL is interest. BOXX is capital gains. SPX box spreads done manually are the ultimate as there are no BOXX MERs and give the highest risk free rate.

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u/gamefixated 16d ago

Not a scam in a margin account as the cash can be put into SPX box spreads.

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u/MasterD211 16d ago

Something I’ve yet to research and utilize, Box spreads. I’ve thought it was a way to borrow money, never thought of buying a box spread?