Fidelity IRA Options Trading: How to Enable It
Fidelity's Options Levels for IRAs
Fidelity uses a three-level system for IRA accounts:
Level 3 is the maximum for any IRA at Fidelity. Levels 4 and 5 (naked options) are not available in retirement accounts.
Step-by-Step Application Process
Step 1: Log in to Fidelity.com and navigate to your IRA account.
Step 2: Go to Account Features. Click "Accounts & Trade" → "Account Features" → "Brokerage & Trading" → "Options."
Step 3: Complete the Options Application. Fidelity will ask about:
Step 4: Select your desired level. You can request Level 1, 2, or 3. Fidelity will approve you at the level they deem appropriate based on your answers.
Step 5: Accept the Options Agreement. Read and sign the options trading agreement electronically.
Step 6: Wait for confirmation. Approval is typically instant for Levels 1-2. Level 3 may take 1-2 business days and occasionally requires a follow-up call.
Tips for Getting Approved at Level 3
Fidelity's algorithm evaluates your application against internal criteria. These factors help:
State real experience. If you've traded options in any account (even paper trading or a different broker), include those years and estimated trade counts.
Select "Speculation" or "Growth" as your objective. Selecting "Income" alone sometimes limits approval to Level 2. "Growth" or "Speculation" combined with "Income" signals that you understand higher-level strategies.
Adequate net worth. While Fidelity doesn't publish minimums, applicants with liquid net worth above $50,000 are generally approved for Level 3.
Consistency matters. Your risk tolerance, experience level, and requested approval level should tell a coherent story. Don't claim 10 years of experience but select "limited knowledge."
Enabling Limited Margin
Fidelity offers "Limited Margin" for IRA accounts, which is separate from options approval but useful alongside it. Limited margin allows you to:
To enable limited margin, go to Account Features → Brokerage & Trading → Margin, and apply for "Limited Margin" on your IRA. This does not allow borrowing or naked options—it simply removes settlement friction.
Common Issues and Solutions
"Your application was not approved for the requested level." Call Fidelity's options desk at 800-343-3548. Explain your strategy and experience. The phone representative can often override the automated decision or suggest what to change on your application.
"I need Level 3 but was approved for Level 2." Trade at Level 2 for 3-6 months, executing covered calls and cash-secured puts. Then reapply. Fidelity tracks your trading activity and is more likely to approve Level 3 when they see responsible Level 2 trading.
"Options don't appear in the trade ticket." Ensure you're on the correct account (the IRA, not a linked taxable account). Options trading may need up to 24 hours to activate after approval.
Fidelity-Specific Features Worth Knowing
Active Trader Pro: Fidelity's desktop platform offers robust options analysis tools, including profit/loss diagrams, probability calculators, and options screening. Free for all Fidelity customers.
Options summary page: Under your IRA, the "Positions" tab shows options positions with Greeks, current P/L, and days to expiration.
Automatic exercise: Fidelity automatically exercises in-the-money options at expiration. If you don't want assignment, close the position before 4 PM ET on expiration Friday.
Pair Fidelity's platform with OptionsPilot for finding the best covered call and put-selling opportunities, and you have a complete IRA options trading setup.