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Last verified by Alex Francisco

Pillar guide investing 9 min read

Best Brokerage For Options Trading Canada 2026

Best Canadian brokerage for options trading in 2026. Interactive Brokers, Moomoo, and Questrade compared on commissions, exchanges, and approval requirements.

By Alex Francisco Published Editor reviewed

Options trading in Canada is more limited than in the US — fewer brokers offer it, and the ones that do charge significantly different prices. Here’s the 2026 comparison.

The 2026 picks

ProfileBest options brokerPricing
Active US options Interactive Brokers $0.65/contract, all exchanges
Casual US options Moomoo Canada $0 + ~$0.65 regulatory
Canadian options Questrade $9.95 + $1/contract
Big 5 customerTD Direct, RBC Direct$9.99 + $1.25/contract (expensive)

Why Interactive Brokers wins on cost

For 100 monthly contracts (typical for moderately active options traders):

  • IBKR: $65/month = $780/year
  • Moomoo: ~$65/month (same regulatory fees apply)
  • Questrade: $9.95 × 100 + $1 × 100 = $1,095/month = $13,140/year
  • TD Direct: $9.99 × 100 + $1.25 × 100 = $1,124/month = $13,488/year

IBKR is 17× cheaper than Big 5 brokers for active options trading. For anyone trading 50+ contracts per month, IBKR pays for itself within weeks.

Tax treatment for options

Options profits/losses in Canada have nuanced tax treatment:

Capital gains treatment (standard for retail):

  • Long option holdings (calls, puts) treated as capital gains/losses (50% inclusion)
  • Premiums received from selling options treated similarly

Business income treatment (if you’re full-time):

  • 100% of profits taxable as ordinary income at marginal rate
  • CRA judgment-based; consult an accountant if options are your primary income source

TFSA risk:

  • Options inside a TFSA almost always triggers “carrying on a business” reclassification
  • All gains become 100% taxable at marginal rate
  • Avoid options inside a TFSA

Approval process

Every Canadian broker requires options approval. The process:

  1. Open a brokerage account (margin account preferred for short options strategies)
  2. Complete the options questionnaire — investing experience, options knowledge, risk tolerance
  3. Choose approval level (1–4)
  4. Wait 3–7 business days for review

Most retail traders qualify for Level 2 (long calls/puts) immediately. Level 3 (spreads) is typically granted with some experience demonstration. Level 4 (uncovered) requires significant capital ($25K+ typical) and demonstrated expertise.

Bottom line

Interactive Brokers is the best Canadian options broker for any moderately active trader. The commission savings vs every alternative dwarf IBKR’s slightly steeper learning curve.

For occasional retail options strategies (a few covered calls per month), Moomoo Canada works fine and offers better charting than IBKR.

For Canadian-listed options specifically (Bourse de Montréal): Questrade or any Big 5 broker. Trading volume is significantly lower than US options though.

Sources & methodology

Verified by Alex Francisco on . Pricing and rates pulled from each broker, bank, or issuer’s public pricing page on or before the verification date. Tax brackets and contribution limits cite Canada Revenue Agency publications. Read the full review methodology or our affiliate disclosure.

Frequently asked questions

What's the cheapest broker for options in Canada?

Interactive Brokers Canada at $0.65 per US options contract is the cheapest mainstream option. For 100 contracts/month, that's $65/year vs ~$1,200 at Questrade. Moomoo Canada matches at $0 base + ~$0.65 regulatory pass-through. Both are CIPF-insured up to $1M and CIRO-regulated.

Does Wealthsimple Trade support options?

Not as of 2026 for retail customers. Wealthsimple has signaled options are on their roadmap but no public launch date. For options trading: Interactive Brokers, Moomoo Canada, or Questrade are your current Canadian choices.

What approval is needed to trade options in Canada?

Each broker requires options approval — typically a questionnaire about your investing experience, options knowledge, and risk tolerance. Approval levels: Level 1 (covered calls, cash-secured puts), Level 2 (long calls/puts), Level 3 (spreads), Level 4 (uncovered/naked options). Approval typically takes 3–7 business days. Most retail traders qualify for Levels 1–2 immediately.

Can I trade Canadian-listed options?

Yes, but liquidity is limited. Canadian-listed options on the Bourse de Montréal are available at Interactive Brokers, Questrade, and most Big 5 brokers. However, trading volume is typically 5–10× lower than US-equivalent options, which means wider bid-ask spreads. Most active Canadian options traders focus on US-listed options for better liquidity and lower spreads.

Should I trade options in a TFSA?

Generally no. The CRA can deem options trading inside a TFSA as 'carrying on a business,' making all gains taxable as ordinary income at your marginal rate (defeating the TFSA's tax-free purpose). Frequent options trading is a strong CRA flag. For retail options strategies (covered calls, protective puts), use a non-registered margin account.

What's the difference between options approval levels?

Level 1: Covered calls (own stock, sell calls) and cash-secured puts (cash + put). Lowest risk. Level 2: Buying calls and puts (long options). Limited risk. Level 3: Spreads (combinations of long/short options). Defined risk. Level 4: Uncovered (naked) calls or puts. Highest risk; requires significant experience and account size. Most retail traders get Level 2 quickly.

Ready to get started?

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Wealthsimple Trade

Best for beginners — $0 commissions, $1 minimum, modern app.

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Questrade

Best for active investors — free ETF buys, USD account, full account types.

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