Does the IRS allow an individual to open a Roth IRA commodity trading account?

[Guest chrysalis]

I am 65, single and in good health. I can afford to speculate up to $10,000 in option trading. Does the IRS prohibit me from opening a commodity trading account and contributing up to $3,500/year? If not, where can I obtain the papers to start an account?

[John G]

You will not find this topic covered in IRS Pub 590. You are not likely to a brokerage that will support a "speculative" trading account for an IRA or Roth. It does not make sense to me to have a small trading account in a tax shelter where you have trouble writing off any losses. Any kind of trading takes up a lot of time and concentration. It seems unlikely that doing all this just to work a 10k account three years in the future is cost effective. You original post did not suggest that your had the investing experience, assets, income or academic training to qualify for a speculative trading account.

I would not recommend this path.

[Demosthenes]

Nothing in the rules prohibits commodity and option trading, but as John G said, it will be dificult to find a custodian that will permit this type of security.

The prohibitions are practical and regulatory, naked calls and options can exceed the account value in an account where the regulations prohibit you from putting more money in to cover.