• TFSAs can help Canadians save for the future.piggy bank image by John Sandoy from Fotolia.com
  
  Many Canadians have opened Tax-Free Savings Accounts (TFSAs) since 2009. Income generated from qualified investments in a TFSA is not subject to federal or provincial taxes. The profit generated from a properly managed TFSA will not affect any future benefit that the investor might receive from the government, such as pensions and child tax credits. The following rules regulate TFSA stock trading transactions.
  
  

Stocks

• Stocks are a staple qualified investment in a TFSA.stocks and shares image by Andrew Brown from Fotolia.com
  
  Stocks are considered a qualified TFSA investment. Qualified stocks include publicly traded companies with either active or de-listed shares, small businesses and venture capital corporations. The Canada Revenue Agency has rules dictating relationships that are not allowed between shareholders and companies for the investment to be qualified. These regulations stipulate that a shareholder must remain at arm's length from the business in order for the investment to remain qualified.
  
  

Warrants and Options

• Stock option trading can act like insurance, protecting TFSAs from a crash.stock market crash image by Paul Heasman from Fotolia.com
  
  Trading stock options and warrants are an allowed investment trading practice in a TFSA. However, naked option writing is prohibited since this is viewed as a business practice. Writing covered options or purchasing call options, put options and warrants are approved trading transactions.
  
  

Mutual and Exchange Traded Funds

• Mutual fund trading can create a diverse TFSA portfolio.stock market analysis screenshot image by .shock from Fotolia.com
  
  Mutual funds are also qualified TFSA investments. Exchange Traded Funds (ETFs) are also allowed by the Canada Revenue Agency. ETFs do not require the actual buying and selling of shares like mutual funds, but trade a basket of stocks much like an index does.
  
  

Foreign Currencies

• Foreign currency exchanges are allowed TFSA investments.australian money image by Horticulture from Fotolia.com
  
  Currency exchanging and swapping is a popular method used to generate income in the international market. Investing in foreign currency is allowed in a TFSA. However, difficulty may arise when trying to find a selection of Canadian brokerages offering TFSAs that allow foreign currency trading.
  
  

Gold and Siver

• Gold bullion trading is approved for TFSAs.lingots d'or image by dead_account from Fotolia.com
  
  Gold and silver bullion and certificates are allowed investments within a TFSA. If the investment is made after February 25, 2005, the precious metal must be acquired from either the producer or a financial institution.