Q: I am considering writing covered call options on Canadian banks inside a RRIF, as part of an income-generating strategy. All of the Canadian banks trade in the US as well as Canada. Would you write call options on the Canadian exchange or on the US exchange? Presumably the latter is more liquid and pricing would be better? Or would it make no difference? Is any Canadian bank better than any other for covered call writing?
5i Research Answer:
We would prefer trading options on the US market. It is (typically) more liquid and bid/ask spreads are. tighter. The larger banks would be better, such as RY and TD. TD has significant US business and is generally traded well by US investors.