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Date: 1/2/2009 9:39:14 AM
Author: max1234 Country Flag
Subject: 15304/19954 - TFSA - TFTA, another hitch
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jdmoodie on 1/2/2009 7:50:44 AM

Well, I have been chomping at the bit to get my TFTA going. This morning I was going through the application and read the part about "capital gains" being tax free. It then occured to me that profits from short sales are not considered capital gains with respect to taxation. So I asked.


No short sales in a TFSA. So, this is not a major issue except it means that I have to continue to hold two accounts if I want to continue to use short sales (I had considered it almost a must to be able to trade all the time). I think I recall asking this about RRSP accounts quite a while ago and got the same answer so perhaps I should have known.

At least I have been working on my long game lately.


max1234 on 1/2/2009 8:39:14 AM

I think you can buy put inside a TFSA. At least, i believe you can do it inside an RRSP so I don't see why you wouldn't be able to do this inside a TFSA. A put will give you similar exposure to a short sale.


jdmoodie on 1/2/2009 5:21:24 PM

Yes, options are... an option. Trouble is I am looking at day trading so I am not going to even think about trying to get into options on that small a time scale.

If I really wanted to play long and short I would just trade an index fund of one form or another that has a bear and bull version HXU and HXD for example. That way I can go long for, or against, the market. I need to look at these ETFs again to see if this is a workable solution for me...I like shorts. I did some testing with them in the past for a secure hedge entry plan. I am just not sure that they track like a stock in the short term trades.

I can run my two accounts in the same software and just switch between the two. long in TFTA and short in the regular margin account. It just means paying full marginal tax on the shorts and none on the long...I need to consider if it is still work the trouble to do so or just go with the long plan....I am leaning towards the long plan.


max1234 on 1/2/2009 6:44:29 PM

I don't know for Canada, but I thought you need 25000$ in equity to be allowed to day trade.

Anyway, good luck in your trading!


jdmoodie on 1/2/2009 7:45:09 PM

Nope. US laws perhaps. $1000 to open an account and they do not observe any pattern day trading rules. Besides, it makes them more commissions.

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