19 May 1993 T.I. (Tax Window, No. 31, p. 5, ¶2512)

The transfer, following the writing by an RRSP of a covered call option, of the underlying securities to a broker or a dealer until the option is exercised or expires will not be considered to be the borrowing of money on the security of those investments for the purposes of s. 146(10)(b).

The writing of naked call options (unlike the writing of covered call options) will be considered to be carrying on a business. Where the RRSP did not have funds to purchase the investments on the exercise of the option and was required to borrow, the income of the RRSP could be taxable under s. 146(4)(a).

S.146(9) will not be applied to the annuitant where a security of an RRSP is disposed of as a result of a covered call option previously written by the RRSP being exercised.

Cash on deposit by an RRSP with a broker to cover the possible exercise of a naked call option written by it would not be considered a qualified investment if the cash were on deposit for any length of time.

A put option is not a qualified investment as it is a right to dispose of, rather than to acquire, a security.