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Selling covered calls and cash-secured puts on Fidelity

Fidelity approves accounts for options in tiers, and the lowest tier is usually enough for covered calls. One tier up adds cash-secured puts. Here's how the ticket works and what to look up before you use it.

Options guide · 6-minute read · Updated 2026-10-26

The short answer

Yes. Fidelity's US brokerage lets approved accounts sell covered calls and cash-secured puts, in taxable accounts and in IRAs. You apply for options on each account, Fidelity assigns a level, and the level decides which trades the ticket will accept. Both halves of the wheel strategy sit in the lower levels.

This page describes what's generally true and stable. Where a detail could have changed, it says so. It isn't an endorsement of Fidelity over any other broker.

The approval levels

Fidelity uses a tiered Options approval level system. The structure has been stable for years: the first tier covers covered calls (and similar trades on shares you own), the next adds buying calls and puts and selling cash-secured puts, and higher tiers add spreads, then uncovered positions. The exact names, numbers and what each includes can be updated, so read the current options agreement when you apply.

Apply through the account's settings. The form asks about experience, goals and finances. Answer truthfully; asking for a higher level than you need gains you nothing for the wheel. IRAs are approved separately and usually cap out below the margin-based tiers, which is fine. The wheel in an IRA covers that account.

The order ticket, step by step

On the website or the app, the options ticket has the same bones:

1. Enter the symbol and open the options chain. Choose an expiry.
2. Pick the strike. The chain shows bid, ask, volume, Open interest and, on the detail view, the Greeks.
3. Set the action to "Sell to open". For a covered call the ticket needs 100 shares in the account per contract; for a put it needs the full strike value in cash (in a cash account or IRA) or the margin requirement (in a margin account).
4. Choose a limit price. Start at or near the mid price; the "natural" price is the bid, which gives the buyer the whole spread.
5. Set the time in force (day or good-till-cancelled) and submit.

Fidelity also has a desktop platform aimed at active traders with a fuller chain view and a way to build a roll as one order. Which features are where can change; check the current platform pages.

A worked example (an illustration, not a trade idea)

Your Fidelity cash account holds $9,000. A made-up stock, XYZ, trades at $50.

You sell one 30-day put at the $45 strike for $1.00, collecting $100 less a small per-contract fee (check the current schedule). Fidelity holds $4,500.

If you're assigned, Fidelity buys the 100 shares with the held cash and the position shows up as stock. You can then sell a call on it from the same ticket. The cash-secured put guide shows what assignment looks like in an account.

Fees that apply to sellers

Fidelity has charged a per-contract fee on options with no base commission, and small regulatory fees on top. Exercise and assignment fees have varied by broker over the years, so look up the current fee page rather than trusting a number from a forum. For a seller of cheap options, the per-contract fee can be a surprising share of the premium; options fees for sellers works that out.

What to check before each trade

• Earnings date. Fidelity shows it on the stock's page. Keep it outside the expiry unless you've decided to hold through it on purpose.
• Ex-dividend date, for covered calls. Early assignment clusters right before it.
• The spread on the strike you want. A wide gap between bid and ask is a hidden cost.
• Your total put obligation across the account. Fidelity shows what's held per position; add them yourself.
• Settlement. In a cash account, wait for cash from a closed trade to settle before reusing it.

Fidelity and Canadians

Fidelity's US brokerage is for US residents. A Canadian looking for the same trades should read selling options on Questrade or selling options on Interactive Brokers, which covers both countries.

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