Fidelity options trading commission

Options Trading.

Options are a flexible investment tool that can help you take advantage of any market condition. With the ability to generate income, help limit risk or take advantage of your bullish or bearish forecast, options can help you achieve your investment goals.

Best-in-class strategy and support.

Whether you are new to options or an experienced trader, Fidelity has the tools, expertise, and educational support to help improve your options trading. And with powerful research and idea generation at your fingertips, we can help you trade in the know.

Low, transparent costs.

Trade for just $4.95 per online trade, plus $0.65 per contract. See how our pricing compares. Plus, get additional savings with Fidelity's price improvement. 1 While the average industry savings per 1,000 shares is $1.66, our average savings with the same amount of shares is $11.25.

Be the first to know: Sign up to be notified of upcoming Education Events Log In Required . And visit our Learning Center for helpful videos and webinars, or contact our Strategy Desk Specialist anytime with questions.

Our independent research and insights help you scan the markets for opportunities. Help improve your trades, from idea to execution.

No matter where you trade or how you trade, we offer sophisticated options trading platforms to suit your needs at home, or on the go.

How to start trading options.

Fidelity was rated Best Online Broker in 2016 and 2017 by Barron's , 2 Investor's Business Daily , 3 and Kiplinger's . 4.

Get 500 free trades.

Fund a new or existing account and receive up to 500 commission-free trades* on U. S. equities, ETFs, and options, and get access to Active Trader Pro ® .

If you have questions about trading options,

$4.95 commission applies to online U. S. equity trades in a Fidelity retail account only for Fidelity Brokerage Services LLC retail clients. Certain accounts may require a minimum opening balance of $2,500. Sell orders are subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal). Other conditions may apply. See Fidelity/commissions for details. Employee equity compensation transactions and accounts managed by advisors or intermediaries through Fidelity Clearing and Custody Solutions are subject to different commission schedules.

Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read Characteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request.

There are additional costs associated with option strategies that call for multiple purchases and sales of options, such as spreads, straddles, and collars, as compared with a single option trade.

There is an Options Regulatory Fee from $0.04 to $0.06 per contract, which applies to both option buy and sell transactions. The fee is subject to change.

System availability and response times may be subject to market conditions.

Active Trader Pro ® is automatically made available to customers trading 36 times or more in a rolling 12-month period. If you do not meet the eligibility criteria, please contact Active Trader Services at 800-564-0211 to request access.

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We make it easy to get started.

If you don’t have a Fidelity account already, you can open and fund an account now.

To trade options you’ll first need to complete an options application and get approval on your eligible accounts.

Trading Options.

Options Basics.

Placing Options Orders.

Options Order Types, Limitations, and Conditions.

OPTIONS BASICS.

What are the different levels of option trading available at Fidelity?

Below are the five levels of option trading, defined by the types of option trades you can place if you have an Option Agreement approved and on file with Fidelity.

The option trades allowed for each of the five option trading levels:

Covered call writing of equity options.

Level 1, plus purchases of calls and puts (equity, index, currency and interest rate index), writing of cash covered puts, and purchases of straddles or combinations (equity, index, currency and interest rate index). Note that customers who are approved to trade option spreads in retirement accounts are considered approved for level 2.

Levels 1 and 2, plus spreads, covered put writing (selling puts against stock that is held short) and reverse conversions of equity options.

Levels 1, 2, and 3, plus uncovered (naked) writing of equity options, uncovered writing of straddles or combinations on equities, and convertible hedging.

Levels 1, 2, 3, and 4, plus uncovered writing of index options, uncovered writing of straddles or combinations on indexes, covered index options, and collars and conversions of index options.

* Retirement accounts can be approved to trade spreads. A new option application and a Spreads Agreement must be submitted at the same time and approved prior to placing any spread transaction.

Why would I buy options instead of buying the underlying security?

You might buy an option instead of the underlying security in order to obtain leverage, since you can control a larger amount of shares of the underlying security with a smaller investment. This gives you the potential for a higher-percentage return than if you were to buy the stock outright. However, with possibility also comes higher risk. If you buy options instead of the underlying security, your options can expire worthless—but if you buy the stock, you still own the shares.

Am I obligated to buy or sell an option's underlying security?

The owner of an option contract is not obligated to buy or sell the underlying security. However, the seller of an option, if assigned, is obligated to buy or sell the security at the strike price.

What requirements must I meet in order to trade options at Fidelity?

You must meet the following requirements to trade options at Fidelity:

A brokerage account An option agreement on file with the appropriate option level for the trade you're attempting to place A margin agreement on file (depending on the type of trade) Sufficient buying power in your account to cover the margin requirement for the trade.

How do I establish an Options Trading Agreement?

Select Update Accounts/Features under the Accounts & Trade tab, and click Margin and Options under Account Features.

Am I authorized to trade options on margin?

To trade on margin, you must have a Margin Agreement on file with Fidelity. If you do not have a Margin Agreement, you must use cash. To establish a Margin Agreement on an account, select Update Accounts/Features under the Accounts & Trade tab, and click Margin and Options under Account Features.

What is an option chain?

An option chain is the list of all the options available for an underlying security.

What is a multi-leg option?

Multi-leg options are two or more option transactions, or "legs," bought and/or sold simultaneously in order to achieve a certain investment goal. Typically, multi-leg options are traded according to a particular multi-leg option trading strategy.

Why should I use the multi - leg option trading ticket and not the single leg option trading ticket?

When placing a multi-leg option trade, use the multi-leg option trading ticket because:

What are call and put options?

With a call option, the buyer has the right to buy shares of the underlying security at a specific price for a specified time period. With a put option, the buyer has the right to sell shares of the underlying security at a specified price for a specified period of time.

Where can I go to learn more about option trading?

You can learn more about trading options through Fidelity’s Learning Center at Research > Learning Center.

How do I see my positions from the Trade Options page?

To see your positions from the Trade Options page, select the Positions tab in the top right corner of the Trade Options page. This tab displays each position's Symbol, Quantity (QTY), Price, Value, and Type. There are also tabs to view Orders and Balances.

During market hours, the figures displayed are displayed in real-time. The date-time stamp displays the date and time on which these figures were last updated. To refresh these figures, click Refresh.

How do I see my balances from the Trade Options page?

To see your balances from the Trade Options page, select the Balances tab in the top right corner of the Trade Options page. This tab displays the same fields displayed on the Balances page. To see more balances, click “Show All” During market hours, balances are displayed in real-time. To refresh the balances, click "Refresh".

A list of commonly-viewed Balance fields also appears at the top of the page under the account drop down box. The Balance fields displayed (when applicable) are Total Account Value, Cash Avail to Trade, Committed to Open Orders, Settled Cash, Margin Buying Power (if you have a margin account), Non-Margin Buying Power and Day Trade Buying Power (if you have a Day Trade Account).

How do I see my orders from the Trade Options page?

To see your orders from the Trade Options pages, select the Orders tab in the top right corner of the Trade Options page. The tab displays information for open, pending, filled, partial, and canceled orders. You may attempt to cancel or attempt to cancel and replace an order from the Orders tab on the Trade Options page.

The date-time stamp displays the date and time on which this information was last updated. To refresh order information, click Refresh.

PLACING OPTIONS ORDERS.

What types of options orders can I place online?

Margin orders require a margin agreement.

How do I direct an options order to a particular exchange?

To direct an options order to a particular exchange, on the Options trade ticket, in the Route drop-down, select Directed. Then select one of the following exchanges: AMEX.

Chicago Board Options Exchange ISE.

International Securities Exchange PCX.

Nasdaq Options Market.

Are there any restrictions when placing a directed trading options order?

Specific share trading is not available when placing a directed options order. Also, The Boston Options Exchange (BOX) will not accept day Stop or Stop Limit orders, or Good 'til Canceled orders.

What price restrictions can I place on an options order online?

You place a price restriction on an option trade order by selecting one of the following order types:

What time limitations can I place on an options order online?

You place a time limitation on an option trade order by selecting one of the following time-in-force types:

You can’t place an on-the-close option order through Fidelity. You must call a Fidelity representative at 800-544-6666 to obtain approval and to place the order.

What conditions can I place on the execution of an options order online?

You place restrictions on an option trade order by selecting one of the following conditions.

How do I enter an option symbol on the Trade Options page?

To enter an option symbol on the trade options page, you must first enter an underlying symbol in the Symbol box. Once the underlying symbol is entered, you are able to choose the expiration, strike and call/put from the dropdowns on the trade ticket.

After I place an option trade, when does it appear on my Order Status screen?

After you make an options trade, it (and its status) will appear immediately on your Order Status screen. The status is updated intraday on your Order Status screen.

Can I cancel an option order? Can I cancel and replace an option order?

You can attempt to cancel an option order from the Order Status screen by selecting the order you wish to cancel and clicking "Attempt to Cancel." Similarly, you can attempt to cancel and replace an order by clicking the order you wish to cancel and replace and clicking "Attempt to Cancel and Replace." You can attempt to replace the leg quantities, limit price, or trade conditions on the trade.

How are fees and commissions for options orders assessed?

How fees and commissions are assessed depends upon a variety of factors. Visit Investment Products > Trading on Fidelity for a complete commission schedule.

What is expiration Friday?

The third Friday of each month is expiration Friday. Options with the same month and year as the expiration Friday date stop trading after the market closes. You should exercise caution with regard to options on expiration Friday. In general, if a long option you purchased has value, you should exercise or sell it before the market closes on expiration Friday, or you’ll lose your profits. Similarly, if a short position option you sold has value, you should buy it back before the market closes on expiration Friday.

OPTIONS ORDER TYPES, LIMITATIONS, AND CONDITIONS.

How are my options paired and what are the requirements?

Your positions, whenever possible, will be paired or grouped as strategies, which can reduce margin requirements and provide you a much easier view of your positions, risk, and performance. Strategies displayed will include those entered into as multi-leg trade orders as well as those paired from positions entered into in separate transactions. Pairings may be different than your originally executed order and may not reflect your actual investment strategy.

When you buy to open an option and it creates a new position in your account, you are considered to be long the options.

Requirement: 100% cash upfront.

Buy 10 XYZ Jan 20 Calls at $1; Cost = 10 (number of contracts) x 1 (option price) x 100 (option multiplier) = $1,000.

The account consists of: Long 10 XYZ Jan 20 Calls.

There are two types of spreads: debit and credit. If you are attempting to open spread positions you must maintain a minimum net worth of $10,000 for 10,000 for equity and indexes equity and indexes in your account. This requirement applies to all eligible account types for spread trading.

*Retirement accounts can be approved to trade spreads. A new option application and a Spreads Agreement must be submitted at the same time and approved prior to placing any spread transaction.

Retirement accounts can be approved to trade spreads. A new option application and a Spreads Agreement must be submitted at the same time and approved prior to placing any spread transaction. If you are approved for spreads trading in your retirement account you must maintain a minimum Cash Spreads Reserve Requirement of $2,000. This is in addition to any requirement, if applicable, for the spread.

Debit Spread Requirements Full payment of the debit is required. Initial spread transactions require an additional cash amount of the minimum cash requirement (also called the cash spread reserve) of $2,000. The minimum cash requirement is a one-time assessment and must be maintained while you hold spreads in your retirement account.

In this example, the first spread order placed is:

Buy 10 ABC Jan 50 Calls at $3.

Sell 10 ABC Jan 55 Calls at $1.

To calculate the debit spread requirement :

Net debit (2.00) x number of contracts (10) x multiplier (100) = Debit ($2,000)

To calculate the cash reserve debit :

$2,000 (debit) + $2,000 (minimum cash requirement) = $4,000 (total cash reserve debit)

The account consists of:

Cash spread reserve (requirement) = $2,000.

Long 10 ABC Jan 50 Calls.

Short 10 ABC Jan 55 Calls.

Credit Spreads Requirements.

You must make full payment of the credit spread requirement.

Initial spread transactions require you to meet the minimum cash requirement, also called the cash spread reserve, of $2,000.

The minimum equity requirement is a one-time assessment and must be maintained while you hold spreads in your retirement account.

Important: Credit spread requirements can be met by the minimum cash reserve up to $2,000. If the spread requirements are greater than $2,000 you must have the available cash to meet the debit or credit spread requirement.

Buy 15 XYZ Mar 60 Puts at $1.00.

To calculate the spread requirement: Total spread requirement ($6,000) = $7,500 (Difference between the strike prices x number of contracts x multiplier) – $1,500 (cash received)

The account consists of:

Cash spread reserve (requirement) = $7,500 ($6,000 cash reserve debit plus $1,500 credit received)

Spread: Short 10 XYZ Mar 65 Puts Long 10 XYZ Mar 60 Puts.

Buy 5 XYZ Mar 60 Calls at $1.50.

To calculate the spread requirement: Total spread requirement ($2,000) = $2,500 (Difference between the strike prices x number of contracts x multiplier) - $500 (credit received)

The account consists of:

Cash spread reserve (requirement) = $2,500 ($2,000 cash reserve debit plus $500 credit received)

Spread: Sell 5 XYZ Mar 50 Calls Buy 5 XYZ Mar 55 Calls.

Debit Spreads Requirement.

Full payment of the debit is required.

Buy 10 XYZ 20 Calls at $2.

Sell 10 XYZ 25 Calls at $.50.

Net Debit = $1.50 or (Long Premium $2 – Short Premium $.50) x 10 (contracts) x 100 (multiplier) = $1,500.

The account consists of:

Long 10 XYZ Jan 20 Calls.

Short 10 XYZ Jan 25 Calls.

Credit Spreads Requirements.

Whichever is lower: The greater of the two naked requirements on the short call, as calculated for naked equity calls The greater of the difference in the strike prices or the difference in the premiums.

Underlying price $55.

Sell 10 XYZ Feb 50 Put at $1.50.

Buy 10 XYZ Feb 45 at $.50 Put.

Net Credit = ($1.50 (short premium) - $.50 (long premium)) x 10 (contracts) x 100 (multiplier) = $1,000.

Difference between Strike prices:

50 (strike price) - 45 (strike price) x 10 (contracts) x 100 (multiplier) = $5,000.

The higher of the Naked Requirement:

(($55 (underlying stock) x .25) - 5 (out of the money) + 1.50 (premium)) x 100 (multiplier) x 10 (contracts) = $10,250 (50 (strike price) x .15 + $1.50 (premium)) x 100 (multiplier) x 10 (contracts) = $9,000.

An option is considered naked when you sell an option without owning the underlying asset or having the cash to cover the exercisable value.

If you are attempting to short naked options you must have a margin account and must maintain a minimum balance of $20,000 for equity and $50,000 for indexes in your account.

Equity calls : The higher of the following requirements:

25% of the underlying stock value, minus the out-of-the-money amount, plus the premium 15% of the underlying stock value, plus the premium.

Equity puts : The higher of the following requirements: 25% of the underlying stock value, minus the out-of-the-money amount, plus the premium Premium plus 15% of the strike price (for both in-the-money and out-of-the-money options)

Index calls : The higher of the following requirements: Broad-based:

20% of the underlying value, minus the out-of-the-money amount, plus the premium 15% of the underlying value, plus the premium Narrow-based:

25% of the underlying value, minus the out-of-the-money amount, plus the premium 15% of the strike price, plus the premium.

For short straddles or strangles, the requirement is the greater of the two naked option requirements, plus the premium of the other option, in cash or available to borrow.

Requirements are subject to change.

What are the requirements for a buy-to-close option order?

You must have written (be short) the number of contracts you want to close in cash or margin. The number of contracts you want to buy at the market close cannot exceed the quantity of contracts held short in the account.

What are the requirements for a sell-to-close option order?

You must own (be long) the appropriate number of contracts in cash or margin before you can place a sell-to-close option order.

Can I sell covered calls online?

You can sell covered calls online in the same cash or margin accounts which include the underlying security.

What are the requirements for selling calls?

You must own (be long) the appropriate number of shares of the underlying security in the same account type (cash or margin) as the one from which you are selling the option You cannot have orders open against the shares of the underlying security. You cannot sell puts to open or uncovered (naked) calls.

Are there any restrictions on all-or-none good-'til-canceled options orders?

All-or-none good-'til-canceled options orders are not allowed on the Chicago Board of Options Exchange (CBOE).

What are the guidelines for limit prices for options?

You may place limit orders for the day only for options spreads and straddles. If the option price is equal to or greater than $10, the limit price should be within 30% of the market price. If the option price is less than $10, the limit price should be within a reasonable amount of the order.

Fidelity Investments Might Have Just Started a Trading Commission Price War.

Fidelity Investments said on Tuesday it cut the price on trades for stocks and exchange-traded funds by 38% for retail brokerage clients.

Boston-based Fidelity’s price reduction to $4.95 from the previous commission of $7.95 a trade, will likely put pressure on the rest of the U. S. brokerage industry. Fidelity’s price offers a discount of more than 50% when compared with some rivals.

“It puts the flag up that Fidelity is the value player in investing,” said Ram Subramaniam, president of Fidelity’s retail brokerage business.

Discount brokers TD Ameritrade Holding (amtd) and E*Trade Financial each charge $9.99 per trade and Charles Schwab (schw) charges $6.95.

Fidelity said it also reduced option pricing to $0.65 per contract, down from $0.75. Fidelity’s online brokerage business has 17.9 million accounts and $1.7 trillion in total client assets.

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