The basic steps to place an options order on Fidelity

To buy options on Fidelity, you log into your account, navigate to the Trade tab, select Options as your order type, and enter the contract details — the underlying stock symbol, expiration date, strike price, and whether you want a call or put. Fidelity will show you the current bid and ask prices. You then enter the number of contracts you want, review the order, and submit it. The order goes to the market and fills when a seller accepts your price or you accept the market price.

Before you can trade options at all, your Fidelity account must be approved for options trading. This is not automatic. You have to request options approval through your account settings, and Fidelity will ask you about your investment experience and financial situation. Approval levels vary — some accounts get approval for covered calls and protective puts only, while others get approval for spreads or uncovered calls. You cannot place an options order until your account has the right approval level for that trade type.

Key Takeaways

  • Your Fidelity account must be approved for options trading before you can place any options order, and you request this approval through your account settings.
  • To buy an option, you go to Trade, select Options, enter the stock symbol and contract details (expiration date and strike price), and submit the order at the bid-ask price shown.
  • Options orders on Fidelity fill during market hours (9:30 a.m. to 4 p.m. Eastern) and you can cancel an unfilled order at any time before the market closes.
  • Each options contract represents 100 shares of the underlying stock, so buying one contract costs roughly 100 times the price shown on the screen.

Getting your account approved for options trading

Log into your Fidelity account and go to Account Settings. Look for the Options Approval section or search for "options" in the settings menu. Fidelity will ask you to complete a questionnaire about your investment experience, annual income, net worth, and investment objectives. Answer honestly — Fidelity uses this information to decide what level of options trading to permit on your account.

Fidelity has four approval levels. Level 1 covers covered calls and protective puts. Level 2 adds spreads and cash-secured puts. Level 3 allows uncovered calls and other more complex strategies. Level 4 is for experienced traders and includes spreads and multiple-leg orders. Most new traders start at Level 1 or Level 2. Approval usually takes one business day, though it can take longer if Fidelity needs more information from you.

Understanding options contracts and pricing on Fidelity

An options contract gives you the right to buy or sell 100 shares of a stock at a fixed price (the strike price) on or before a specific date (the expiration date). When Fidelity shows you an option price of $2.50, that is the price per share, not per contract. One contract costs $2.50 × 100 = $250, plus any commission if your account is not commission-free.

Fidelity displays two prices for every option: the bid (what buyers will pay right now) and the ask (what sellers are asking right now). If you want to buy, you place an order at or above the ask price. If you want to sell, you place an order at or below the bid price. The wider the gap between bid and ask, the harder it is to fill your order at a good price. Options on large, liquid stocks like Apple or Microsoft have tight bid-ask spreads. Options on smaller stocks can have wide spreads and may not fill at all.

Placing a buy order for a call or put option

Open the Trade tab in your Fidelity account. In the search box, type the stock symbol. Once the stock appears, click on it. You will see a list of available options contracts — calls and puts, organized by expiration date and strike price. Click on the contract you want to buy.

A trade ticket will open. Make sure "Buy" is selected and "Call" or "Put" is correct. Enter the number of contracts you want to buy. Fidelity will show you the current bid and ask prices. You can place a market order (buy at the current ask price immediately) or a limit order (buy only if the price drops to a specific level you set). For most traders, a limit order at or just above the ask price is safer because it gives you control over the price you pay. Review the order details — symbol, contract type, expiration date, strike price, number of contracts, and total cost — then click Submit.

How long options orders take to fill and when you can cancel

Options orders fill during regular market hours, 9:30 a.m. to 4 p.m. Eastern time, Monday through Friday. If you place an order before the market opens or after it closes, the order waits until the next market open. If you place a market order during market hours, it usually fills within seconds. If you place a limit order, it fills only if another trader accepts your price — this can take minutes, hours, or never happen at all.

You can cancel any unfilled order at any time before the market closes. Go to the Orders section of your account, find the order you want to cancel, and click Cancel. Once the market closes at 4 p.m., any unfilled orders are automatically cancelled unless you set them to "good-til-cancelled" (GTC). A GTC order stays active until it fills or you cancel it manually, but it expires after 60 days on Fidelity.

Viewing your options positions and closing trades

After your order fills, the contract appears in your Positions section. Fidelity shows you the number of contracts you own, the price you paid, the current market price, and your unrealized gain or loss. As the stock price moves and the expiration date approaches, the option price changes. You can sell the contract at any time during market hours by going to your Positions, clicking on the option, and placing a sell order.

If you hold the option until expiration and it is "in the money" (profitable), Fidelity will automatically exercise it — meaning you will buy 100 shares per contract at the strike price for a call, or sell 100 shares per contract at the strike price for a put. Make sure you have enough cash or margin to cover this if you are buying shares. If the option is "out of the money" (worthless), it expires and disappears from your account.

Frequently Asked Questions

Do I need a minimum account balance to trade options on Fidelity?

Fidelity does not have a stated minimum balance to trade options, but you need enough cash or margin in your account to cover the cost of the contract. If you want to buy a call option that costs $250, you need at least $250 available. Some strategies, like uncovered calls, require a margin account and higher approval levels.

Can I trade options before or after regular market hours?

No. Options orders on Fidelity only fill during regular market hours, 9:30 a.m. to 4 p.m. Eastern. You can place an order before or after hours, but it will not fill until the market opens. Extended-hours trading is not available for options.

What happens if I do not have enough money to cover an automatic exercise?

If you own a call option that is in the money at expiration and you do not have enough cash to buy the 100 shares, Fidelity will either sell the option for you automatically (if you have that setting enabled) or exercise it on margin (if your account is margin-approved). Check your account settings to see what Fidelity will do by default.

How do I know if an options order is a good price?

Compare the bid-ask spread to the option's current price. A spread of $0.05 on an option trading at $2.00 is tight. A spread of $0.50 on the same option is wide and means you will pay more to buy or receive less to sell. Tighter spreads mean better prices. You can also check the volume — options with high volume usually have tighter spreads than options with low volume.