Fidelity LIES TO THEIR CUSTOMERS

[HarmonicaBruce]

I'm extremely angry.  Years ago I got all my IRA and 401K accounts into one roll-over IRA at Fidelity.  I asked about trading options, and I was told that I needed to apply, which I did.  I was approved to sell covered calls, but not covered puts.  I asked them why I was denied the ablity to sell covered puts, and I was told it's a federal regulation that you can't sell covered puts in an IRA.  

Like a damn fool, I believed them.  I didn't think they'd tell me such a bold faced lie.  So I opened a regular (non-IRA) account with them, and applied to sell covered calls and covered puts.  I was denied selling covered puts.  I called them and asked why.  They REFUSED to tell me.  I said "so you're refusing to tell me why I can't sell covered puts"?, and I was told "no, we're not refusing to tell you, we just won't tell you".  

Fidelity has cost me thousands of dollars.  When my calls expire, I'll me closing my roll-over IRA account (moving it to TD Ameritrade).

My advice is DON'T DEAL WITH FIDELITY unless you don't care if you're lied to.

 

[offroad]

Using Vanguard. Not sure about covered puts or calls. But they are also not exactly user friendly for moving between accounts. You have to plan it all

 

[ccbreder]

I have invested with Fidelity for decades. I only use them as a retirement IRA. They have been the best of the 4 different companies where I have had accounts.

 

[offroad]

Ccbreder - best for interest rate on your IRA? Best for advising you to move it before the market crashes? Best for just telling you how much money you have? Or for transferring money into it?

 

[IGBT]

Covered puts...you don't mean cash secured puts (which almost every account can do) but spreads?  Where you sell a put and reduce your risk by buying a put at a different strike on the same stock?

You can do synthetic puts with calls, which will give you essentially the same risk/reward.

 

[HarmonicaBruce]

Covered puts...you don't mean cash secured puts (which almost every account can do) but spreads?  Where you sell a put and reduce your risk by buying a put at a different strike on the same stock?

You can do synthetic puts with calls, which will give you essentially the same risk/reward.

I mean cash covered puts.  For example, today I sold a cash covered put, UCO, strike $33, expires Aug 15.  I got $3.30 for them.  I have $33 cash in my account to cover these puts.  That cash is "tied up" as long as its covering the put.  I may be forced to buy UCO at $33, but I don't care, since UCO is trading at $33 anyway.

When I first tried to sell cash-covered puts with my fidelity account, they wouldn't let me.  I asked them why not?  The cash is sitting there in my account earning .00000001 % interest / century (ok, I'm exaggeratting a little).  They told me that federal regulations don't allow selling covered puts in an IRA account.  That was an OUTRIGHT LIE!  I didn't figure it out until a few days ago.  I assumed Fidelity didn't lie to their clients.  THEY DO.  

I loved Fidelity until I found this out.  

I'm not sure what you mean about selling a put to reduce my risk.  What risk?  I want to buy UCO at $33, but instead of buying it, I sell a put.  What risk am I taking?  I guess I could lose $33 per share (if UCO goes to zero), but since I got $3.30 for my put, I can only lose $29.70 / share.

 

[IGBT]

Eh, no, I was thinking you were talking about selling puts and covering those with other puts.

For example, I am able to sell a Netflix $700 put in my IRA and not need $70,000 to cover it if I also buy a cheaper $650 put.   My max loss is thus $5,000 (700 - 650 times 100 )

It sounds like you can't even do cash secured put selling, which is ridiculous since that is like level 0 option trading.

 

[ccbreder]

Fidelity has the best choices at the lowest costs for how I want to invest my 401K. No they don't hold my hand and warn me if the market is going down. They also don't charge me for advice I don't want or need. I have most of my investment in their fund that is indexed to S&P 500. I do have some more exotic funds, but that is just me. If the US market shits, we are all done anyway.