Fidelity for Options: Account Setup, Approval Levels, and Your First Trade

Fidelity is one of the largest U.S. brokerages, with a full toolkit for options: a website option chain, a mobile app, and Active Trader Pro for desktop. This guide walks through the practical setup: opening the account, getting approved for the right options tier, funding it, placing a first trade, and what it costs.

Opening an account

Opening a Fidelity brokerage account is a fully online application that usually takes about 10–20 minutes to fill out. Fidelity charges no fee to open a retail brokerage account and requires no minimum deposit — you can open the account with $0 and fund it later, even with a small amount. You will need your Social Security number, date of birth, contact details, and employment information, plus a linked bank account (routing and account numbers) to fund it. A government-issued ID may be requested for identity verification.

In most cases the account is opened and ready within a day or two, sometimes faster. Electronic transfers from a linked bank typically take a day or two to settle before the funds are fully available. You must be 18 or older to open an individual brokerage account. Note that if you later want to trade on margin, Fidelity requires at least $2,000 of margin equity in the account.

Fidelity gives you three ways to trade: the Fidelity website (Fidelity.com), the Fidelity mobile app (iOS and Android), and Active Trader Pro, the downloadable desktop platform aimed at active traders. Your login works across all three.

Getting approved for options

Options trading at Fidelity requires a separate options application — on top of the brokerage account itself — in which you answer questions about your financial situation and investing experience and sign an options agreement. Fidelity uses three approval tiers, and its official options FAQ spells out exactly what each one unlocks. Approval requirements get more rigorous at each tier, and not every account type qualifies for every tier.

Options Tier 1

Tier 1 is the entry level, and it already covers a lot. It includes:

• Buy-writes (buying stock and writing a call against it in one order)
• Selling covered calls
• Rolling covered calls
• Buying calls and puts
• Selling cash-covered puts
• Long straddles and strangles

The important detail for beginners: cash-secured puts are a Tier 1 strategy at Fidelity. You do not need a higher tier or a margin account to sell a put against cash you already hold. IRAs are eligible for Tier 1, and qualifying IRAs can also be approved to trade spreads of up to four legs under Fidelity's limited-margin rules — in a taxable account, spreads need Tier 2.

Options Tier 2

Tier 2 includes everything in Tier 1, plus:

• Spreads of up to 4 legs (vertical spreads, iron condors, calendars, butterflies)
• Selling covered puts secured by short stock

Tier 2 requires margin access, because spread positions are held against margin. As a guideline from Fidelity's margin FAQ, holding spreads calls for $10,000 in total account value and $2,000 in margin equity.

Options Tier 3

Tier 3 includes everything in Tiers 1 and 2, plus the highest-risk strategies:

• Selling uncovered (naked) calls and puts on stocks, ETFs, and indexes
• Short straddles

Tier 3 also requires margin. For naked equity options, Fidelity requires $20,000 in total account value and $2,000 in margin equity; for naked index options, $50,000 in total account value and $2,000 in margin equity. Some account types — including Health Savings Accounts, Keogh plans, investment clubs, and custodial accounts — can only enroll in Tier 1, because they cannot use margin.

How to apply and upgrade

On Fidelity's website, hover over the Accounts & Trade tab at the top, click Account Features, and look under brokerage and trading for the option to apply for options permissions. You will answer questions about your finances, experience, and objectives, then sign the options agreement. Many applications are decided quickly, though some take longer to review. If you are approved for Tier 1 and want Tier 2 or 3 later, you can apply to upgrade once you have experience and meet the financial requirements. Answer honestly — the tiers exist because higher-tier strategies can lose money much faster than lower-tier ones.

Funding your account

Fidelity lets you move money in several ways, all managed under Transfers on Fidelity.com or in the mobile app:

• Electronic funds transfer from a linked bank account — the standard, free option.
• Bank wire — the fastest option. Fidelity charges no fee for incoming wires, though your bank may charge to send one.
• Check deposit by mail or through the app's mobile check deposit.
• Direct deposit or BillPay into the account.
• Full account transfer (ACATS) from another broker to move an existing account over as-is.

Electronic transfers take a few business days to fully settle. Check the funds-availability rules on Fidelity's transfers page before you plan around timing — options orders need settled funds behind them.

Placing your first options trade

On Fidelity.com, look up any optionable stock and open its Options tab to reach the option chain. Expiration dates are listed for you to select, and each expiration shows calls and puts by strike price, with the bid, ask, volume, open interest, and implied volatility for each contract. On the Fidelity mobile app the flow is similar: open a quote, switch to the options view, pick an expiration and strike. In Active Trader Pro you get a fuller multi-leg ticket for building spreads.

The order ticket works like this:

1. Choose the action: buy or sell, and whether this trade opens or closes a position (for example, "Buy to Open" or "Sell to Open").
2. Enter the quantity of contracts.
3. Choose the order type and a limit price. Fidelity accepts options limit orders in 1-cent increments for most symbols, so you can price your order precisely against the bid/ask spread. A few index symbols (like SPX and NDX) trade in 5- or 10-cent increments.
4. Use the preview screen to review the estimated cost or credit, commissions, and margin impact — then place the order.

As at every broker, use limit orders for options. The premium is quoted per share, so multiply by 100 to see the full contract price. Before you submit, glance at the bid-ask spread and volume: a tight spread and real volume mean your limit order has a fair chance of filling near the mid-price. If your order sits unfilled, the market is telling you something — do not chase it with a market order.

What it costs

Fidelity charges $0 commission on online U.S. equity and options trades, plus $0.65 per contract on options. That fee applies to both opening and closing legs, so a four-contract round trip costs $5.20 in contract fees.

A few cost details worth knowing. Online buy-to-close orders for options priced at 65 cents or less are commission-free — Fidelity waives the per-contract fee when you close out a cheap contract. Exercises and assignments are commission-free and carry no per-contract fee. There is also a small Options Regulatory Fee (roughly $0.03–$0.05 per contract) that applies to both buys and sells, and sell orders are subject to a tiny activity assessment (about $0.01–$0.03 per $1,000 of principal).

Index options carry extra exchange fees on top of the $0.65 per contract. Fidelity's own FAQ lists them: SPX $0.50, NDX $0.45, XEO $0.35, OEX $0.30, VIX $0.30, RUT $0.15, and DJX $0.14 per contract. If you trade index options, those add up — factor them into every trade.

The honest fine print

Options involve significant risk and are not appropriate for all investors. A bought option can expire worthless, wiping out the full premium. A sold put can leave you buying the stock at the strike price in a falling market. Uncovered calls carry theoretically unlimited risk — the stock can keep rising and your obligation rises with it. Spreads cap risk, but they can still lose their full maximum loss. Read the Characteristics and Risks of Standardized Options (the options disclosure document) before you trade anything — Fidelity requires you to acknowledge it for a reason.

This is educational material, not financial advice. And one practical note: brokers change fees, approval rules, and minimums over time. Before you act on anything here, check Fidelity's current commissions page and options FAQ for the latest figures — those pages are the source of truth.