timothy sykes logo

Penny Stocks News

How to Trade Options on Fidelity

Timothy SykesAvatar
Written by Timothy Sykes
Updated 4/20/2023 7 min read

Learning how to trade options on Fidelity is easier than on many other brokers, thanks to its user-friendly interface and ample educational resources.

Fidelity Investments is a large financial services company with numerous offerings. It has online, mobile, and desktop trading platforms.

Fees-wise, it’s very competitive. There are no minimum deposits and very few fees.

Different brokers cater to different kinds of traders. There are no 100% good or bad online brokerages, just the ones that work for you… and the ones that don’t.

Is Fidelity the right broker for YOU to trade options on? Let’s look into what it offers to help you make the right decision.

Trading on Fidelity

© Millionaire Media, LLC

Fidelity is a well-rounded online brokerage fit for new and experienced traders. It also has other offerings like retirement funds and cash management services.

Here are some prominent features you’ll find on Fidelity:

  • No minimum deposits or account fees
  • Commission-free trading
  • Various tradable securities
  • Two trading platforms
  • Third-party stock research services
  • 24/7 phone and online customer service
  • 200 nationwide branches for in-person support

Want to know about other good brokers for options trading? Check out my reviews of Webull, Interactive Brokers, and Questrade.

Benefits of Trading Options Using Fidelity

What can you get by being a Fidelity Brokerage Services LLC user? Here are several key benefits when you trade options on Fidelity:

Multiple Trading Platforms

Post image

Get my weekly watchlist, free

Sign up to jump start your trading education!

Fidelity offers two trading platforms for its users: Fidelity Investments and Active Trader Pro. The former is available on the web and in a mobile app, while the latter is its desktop power platform. Both boast advanced screeners and trading tools.

Active Trader Pro offers more features for advanced traders. It’s highly customizable. It also gives you robust technical analysis and advanced options tools. These tools help you make informed decisions for trading options.

If you’re in the market for a power trading platform, try StocksToTrade. It’s my favorite trading platform (and the one I helped design).

Give StocksToTrade a try today — a 14-day trial is only $7!

Numerous Tradable Assets

Fidelity has a wide selection of tradable securities. Its offerings include:

  • Stocks
  • Bonds
  • Exchange-traded funds
  • Mutual funds
  • Options contracts
  • Foreign currencies
  • Select cryptocurrencies

Fidelity also offers fractional share trading. Fractional shares are portions of a high-cost stock sold at lower prices.

We’re here for options contracts. But knowing what other assets a broker offers is never a bad idea. This will give you space to try different strategies without your broker standing in the way.

Customer Service and Branch Office Presence

You can contact Fidelity at any time. It offers 24/7 customer service with fast response times across phone, online chat, and email. As it’s a full-service broker, you can also do broker-assisted trades for a fee. Either way, they’ll help you with your questions about options trading.

Prefer in-person service? Fidelity has you covered. It operates over 200 branch offices nationwide.

Robust Educational Content

More trading education is always a good thing. Fidelity provides lots of educational content in articles, videos, and webinars. There’s a comprehensive options education section sourced from the Chicago Board of Options Exchange (CBOE).

Options Reports

Fidelity publishes a daily S&P Options Report. It reviews options performance and evaluates profit potential.

Lower Trading Costs

Fidelity has no commission fees or additional costs for most of its tradable assets. This means you won’t be charged fees on stock trades. There’s still a $0.65 contract fee for option trades, like there is for most other full-service brokerages.

Zero Minimum Deposit

Zero minimum deposits is already an industry standard. However this is deceptive in options trading.

Like other brokers, Fidelity imposes a minimum equity requirement for more advanced options strategies, as well as a margin account minimum of $2,000.

Steps to Start Trading Options on Fidelity

© Millionaire Media, LLC

Thinking about choosing Fidelity as your options broker? Here’s a step-by-step guide to trading options on Fidelity:

1. Open a Fidelity Account

The first thing to do is create a Fidelity account. Fidelity offers many account types, but the one you need to choose is its brokerage account.

2. Log in to the Fidelity App

Log into your Fidelity account through the website, mobile app, or Active Trader Pro.

Once in, fund your account. There are no minimums to start trading.

3. Select Options on the App

You need approval before trading options on Fidelity. Choose the Options menu and press the Apply to trade options button. You’ll be presented with an application.

The options application form assesses your financial situation and trading experience, which Fidelity will review before giving you clearance. It might take a couple of days for your approval to come through.

Like other brokers, Fidelity offers multiple levels of options trading. The more experienced you are, the higher the options trading level you’ll qualify for.

4. Start Trading Options

Once you have an options agreement, you’re ready to trade! Go into the Trade drop-down and select Options as your transaction type. Then, choose your preferred stock and start trading.

The usual trading principles still apply:

  • Study strategies from successful options traders
  • Don’t copy other traders’ trades or their stock picks
  • Make your own watchlists
  • Record every trade for future review

Succeeding at options trading means studying hard and refining your strategy every day. A great teacher will help you build your knowledge base faster.

If you’re searching for a mentorship program, check out my former student Mark Croock’s Evolved Trader. He’s taken my penny stock strategies and applied them to options trading — making $3.9 million in career earnings in the process!

Here’s a sneak peek of Mark’s curriculum:

Sign up for the Evolved Trader program today and start your journey towards becoming a self-sufficient options trader!

How much has this post helped you?

Leave a reply

Author card Timothy Sykes picture

Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

Post image

Get my weekly watchlist, free

Sign up to jump start your trading education!

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”