Buying US ETFs through call options

Glina wrote here that EU investors can buy US ETFs through call options.

How does this work in detail?
Does it work from any broker?

It will work with any broker which allows you to trade options on US ETFs, IB is one of them. When you buy a call option, you buy the right to buy an underlying security within a predefined time period for a predefined price. If you exercise your right, the underlying security will be put in your portfolio.

Alternatively, you can sell put options with the shortest time expiration possible and a price higher than the current market price of the security. On exercise, again, the security will be put in your portfolio. The other side of this transaction has the right to exercise. You get the premium immediately when you sell (issue) an option.

Not sure why you’d want to do that, as you are free to trade US ETFs as a Swiss investor. If at one time it gets blocked, probably buying calls is the safer way as the premium you get for selling put is taxable income.

Here is an example on how to exercise options on IB

Premiums from selling options do not qualify as income. Thus, unless you qualify as a professional trader, premiums from options do not trigger taxes.

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I wouldn’t sell put options. Gives you less control and you stay highly leveraged for a way longer time than necessary. I would buy a call option slightly below current trading price and immediately exercise the right.

Would it be easier to buy the US ETF directly ?

If the purchase of US ETF is “forbidden” in the near future due to regulations, it is unlikely that a broker will allow us to exercise an option and receive its US ETF underlying. It shall be blocked by its system in order to avoid a breach of regulation. If not, it will see it as a serious loophole.

Hope that we will receive soon more details regarding the effective implementation of LSfin.

Well EU people are exactly doing that to buy US ETFs. So it should work for Swiss people too.

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What is the source ? glina few posts above ? broker FAQ, EU legislation other ? more information would be useful to confirm it.

Buying/selling call/put options to replicate an underlying shall be possible, going to the exercise more unlikely.

Can you point me to some source of that information?
You can basically sell options forever, harvesting premiums and not get assigned any shares. How would that income be declared in the tax form?

If you’re interested in the tax topic, there’s some discussion in another thread. It’s not as risky and clear cut as people seem to think. The premium could be tax free under certain conditions.

Here you’ll find a document of the EStV detailing out the taxation of bonds, derivatives (e.g. options) and structured products. On page 18 it reads: “Gemäss Rechtsprechung des Bundesgerichts sind Gewinne aus Termingeschäften steuerlich gleich zu behandeln wie solche aus Kassageschäften und stellen deshalb Kapitalgewinne dar. Soweit Kapitalgewinne durch das Gesetz nicht ausdrücklich erfasst werden, bleiben solche aus Termingeschäften (Futures) und Optionsgeschäften sowohl beim Bund (Art. 16 Abs. 3 DBG) als auch in den Kantonen und Gemeinden (Art. 7 Abs. 4 Bst. b StHG) für die Belange des Privatvermögens steuerfrei. Entsprechende Verluste im Privatvermögen sind dafür auch nicht abzugsfähig.”

In english it basically says: According to the Federal Tribunal, gains from options qualify as capital gains. If the law does not provide otherwise, capital gains do not trigger income taxes for private investors (Art. 16 para. 3 DBG; Art. 7 para. 4 lit. b StHG).

Thus, unless you qualify as a professional investor, option premiums do not trigger income tax. (Problem beeing that trading no options is one of the five safe harbor rules regarding professional trading; however, as long as you dont trade heavily in options i would not expect the tax office to qualify you as a professional investor).

Re. declaration: I do not declare them as they are not taxable for me anyway (This will also prevent the tax office from considering me a professional investor :wink: ).


Oh wow. Good to learn that. Thank you very much.
I guess this day marks the day where all my purchases will be via issued puts :-).

why? if you sell a put, you will get exercised in falling markets only and you will miss out on gains in bull markets.

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You don’t miss out on in rising markets, as the premium you receive is higher than the price difference. In the end, you still get the stocks you want.

Well it depends on the barrier and your expectations for returns. Some folks might be happy only getting assigned in a massive crash and otherwise making steadily 3% per year

Another bonus is getting the premium right away. Not at the end of the quarter or year.

elaborate pls? (or is this the ultimate free lunch?)

Puts can be a tool for getting 100 shares with a discount. One can always sell one at or in the money.

No but in the best case you bring the your basis price of the share down by acting as an insurance company to others.

One downside could be that when assigned you have to buy at least 100 shares at a time.

you will never get shares at a discount selling puts. You get a premium for taking the risk of a falling stock price. If the stock price does not fall you keep the premium. if the stock price does fall, you end up buying stocks above market value.

And still getting the premium.


… which is higher than the underlying price difference, thus effectively reducing the cost basis.