OPTIONS IN SMSF

Options are just investment contracts with an obligation to pay based on an underlying share price. Options are used as part of hedging strategies and that’s where ATO ID 2009/110 is relevant.

To put it “simply” the Subdivison 295-B of ITAA 1997, overrides other parts of the Income Tax Acts for complying super funds, so where ordinarily you may treat something on a profit account, where you have an SMSF you will need to treat it on capital account where it falls within the scope of Subdiv 295-B.  Reading both Subdiv 295-B and ATO ID 2009/110 the losses from options trading has to be treated on capital account.