Options Order Ticket

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Overview

NOTE:

You use the Options Order Ticket to create an options order. The valid order actions are Buy Calls to Open, Buy Calls to Close, Buy Puts to Open, Buy Puts to Close, Sell Calls to Open, Sell Calls to Close, Sell Puts to Close, and Sell Puts to Open.

Accessing the Options Order Ticket

  1. Select Trade > Order Ticket > Options. The Options Order Ticket screen displays.
  2. From this screen you can create an Options Order.
  3. After creating an order, you can:
    • Verify the order before sending it to market and displaying it in the Sent Orders List.
      OR
    • Send it to market and display the order in the Sent Orders List.
      OR
    • Save it to the Unsent Orders List so you can send it at a later time.

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Options Order Types

Single Leg

The Single Leg Option trading is a contract between a buyer and a seller. Every option has an expiration date, which is the 3rd Friday of every month, and a strike price, which represents the price at which the option can be executed. The price the client pays for the option contract is referred to as the premium. For example, if the strike price is $30.00 and the premium is $2.30, the break even would be $32.30 ($30.00 + $2.30). Option contracts have an opening and closing transaction where the opening transaction represents the purchase or sale of a contract and the closing represents the closing sale or purchase. Every option contract transaction has two parties a buyer and seller (writer). The buyer of the call option tends to be bullish thinking the stock price will rise, while the buyer of the put option is bearish thinking the price of the underlying will decrease. Both call and put writers seek one outcome, which is income from the sale of the contract to the buyer.

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Options Trading Levels

In order to execute options trades, Fidelity requires an option agreement and in some case a margin account. The table below summarizes the type of trading authorized according to approval level.

Equity
Index
Straddles/Combinations
Spreads
Level Description
Calls
Puts
Calls
Puts
Calls
Puts
Calls
Puts
1 Covered Call Selling (Writing)
x
2

Purchases of Calls/Puts
Purchase of Straddles/Combinations

x
x
x
x
x
x
3

Equity Spreads
Covered Put Writing

x
x
x
x
x
x
x
x
4

Uncovered Selling (Writing) of Equity Options
Uncovered Selling (Writing) of Straddles/Combinations on Equities

x
x
x
x
x
x
5

Uncovered Selling (Writing) of Index Options
Uncovered Selling (Writing) of Straddles/Combinations
Uncovered Selling (Writing) of Index Spreads

x
x
x
x
x
x
x
x

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Creating an Options Order

NOTE:

  1. The Order Type drop-down list determines the order ticket type that displays. Choose Option from the available selections.
  2. Using the drop-down list associated with the icon, specify whether you are creating an order for an Account, Group, or Client.
  3. Complete the associated field by doing one of the following:
    • If you choose Account, when you select in the field, the Account Search feature displays to assist you in locating the desired account.
      OR
    • If you choose Group and already know the Group Name, enter it in the field. If you do not know the Group Name or are unsure of it, select the Group Search link to display the Account, Group, and Client pop-up screen with the Group Tab selected. Enter one or more letters in the associated text field and select the Search button. A No matching results found message displays if there are no groups that match the information you entered. If there are matches, select the desired entry in the results list to close the pop-up screen and populate the field.
      OR
    • If you choose Client and already know the Client Name, enter it in the field. If you do not know the Client Name or are unsure of it, select the Client Search link to display the Account, Group, and Client pop-up screen with the Client Tab selected. Enter one or more letters in the associated text field and select the Search button. A No matching results found message displays if there are no clients that match the information you entered. If there are matches, select the desired entry in the results list to close the pop-up screen and populate the field.
  4. The order ticket populates with the information from your selection. The banner in the top portion of the screen displays some details about the chosen account, group, or client:
    • For an Account: Account Number (NOTE: Use the left-click shortcut menu entries to access the following account tabs: Account Summary, Positions, Balances, History, and Order Status), Primary Owner Name, Net Cash, Net Worth, Account Type, and As Of information. Also, when creating the order for an account, you can view the positions and balances for the account in context directly from the order ticket. Select the Refresh link to update the values in each section. Select a Positions column heading to sort the entries according to that criterion. The sorting method is indicated by a caret in the selected column heading; the caret points upward for Ascending ordering and points downward for Descending ordering. Selecting the column toggles between Ascending and Descending order. Please see Account Positions and Account Balances for descriptions of the fields in each section.
    • For a Group: Accounts (the number of accounts associated with the group), Group Name (NOTE: Use the left-click shortcut menu entries to access the following group tabs: Group Summary and Positions), Group Type, Source, and As Of information.
    • For a Client: Accounts (the number of accounts associated with the client), Client Name (NOTE: Use the left-click shortcut menu entries to access the following client tabs: Client Summary, Positions, and History), Primary Owner Name, Source, and As Of information.
  5. Select the order Action from the drop-down list.
  6. Indicate the Quantity, or the number of contracts, for the order. NOTE: This value must be a whole number.
  7. Specify the Symbol/CUSIP either by entering the information in the field or using the Security Lookup feature. NOTE: Select the Option Chain icon to display the Option Chain Search pop-up screen that helps you to locate the desired security.
  8. When the Symbol/CUSIP field is populated, a Quote link displays. Select this link to display a pop-up screen containing real-time, pricing information related to your selection. NOTE: A Symbol Not Found message displays is the field does not contain a valid Symbol or CUSIP.
  9. Choose the Account Type from the drop-down list; selections are Cash or Margin.
  10. Specify the Price Type; selections are Market, Limit, or Stop Loss.
  11. If your Price Type selection is Limit or Stop Loss, the Limit/Stop field displays; complete the field as required.
  12. If your Price Type is Limit, using the associated drop-down list, select the Time in Force for the order. NOTE: If the Price Type is Market or Stop Loss, the Time in Force is Day and cannot be modified.
  13. Optionally, specify the Special Conditions for the order (if any) using the associated drop-down list.
  14. Optionally, specify the Client Confirm Note to include with the trade; selections are: None (Blank), Cross Trade, Client Requested, or Advisor Directed.
  15. If the order Action is Buy (or Sell) Calls to Close or Buy (or Sell) Puts to Close, make the optional Transaction Disposal Method selection using the associated drop-down list that displays. This selection is used to choose an alternative cost basis disposal method for this trade only. You also can choose to Specify Contracts that enables you to identify which contracts to sell and when to sell them. NOTE: Lots purchased intra-day are not available for this type of sale. Proceed to the separate Specific Contracts section for a description of this process and the remainder of the steps involved in creating an order using Specific Shares or Contracts. NOTE: The method you designate on the ticket is used for this specific order and does not replace the account's established cost basis disposal method. Also, the Transaction-Level Disposal Method Override does not apply to the following cases:
  16. Once all fields are completed, select one of the following the buttons:
    • Reset Ticket: Returns all ticket fields to their default settings, including any specified preferences.
    • Verify Order: The system checks for errors that may block the trade if you were to send it to the market. An order verification window displays and you can use it to review the trade details before you proceed with the order. If no errors are indicated, select the Send Now button to send the trade to the market and place it in the Sent Orders List or select the Save Order button to save the order to the Unsent Orders List. If an error is found, you must select the Edit Order button to make the necessary changes; the fields that you must correct are flagged with a red asterisk. NOTE: This button is disabled if you selected to trade on a Client or Group.
    • Send Now: Sends the order to market and places it in the Sent Orders List. A confirmation pop-up screen displays notifying you that the order was sent to the market. NOTE: This button does not display if you do not have the appropriate entitlement.
    • Save Order: Saves the order to the Unsent Orders List. A confirmation pop-up screen displays.
  17. If you saved the order, from the confirmation screen, you can:
    • Select the Close link to close the confirmation screen after viewing the order information.
    • Select the View Orders button to close the confirmation screen and display the Unsent Orders List.
    • Select the Place Another Trade button to close the confirmation screen and display the order ticket.

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Specific Contracts"

NOTE:

  1. If you selected the Yes radio button to Specify Contracts, the Continue & Specify Contracts button displays at the bottom of the Order Ticket. Select this button to begin the process.
  2. There are two tables on the Specific Contracts screen; one displays the current open lots and another allows you to enter lots manually. You activate one of these two tables by selecting its associated radio button; the top table containing the open lot information is enabled by default. NOTE: Column definitions are described in the table below.
  3. If you use the open lots table, select within a field in the Contracts Specified column to activate it. Enter the number of contracts you want to deplete from a particular tax lot in its corresponding Contracts Specified field. Continue adding contracts until you reach the limit or the desired number (equal to or less than the limit). NOTE: Running totals display below the table and update dynamically as you enter values. Contracts Specified plus Contracts Remaining (also known as unspecified contracts) must equal Total Contracts in Order. Any contracts in the order left unspecified are depleted FIFO.
    OR
    You can select the Pre-Fill Selections link above the table to display a pop-up screen, which you can use to choose how you want to sort open tax lots for the current trade. The system then pre-fills the Specific Contracts screen according to your selection instead of your completing it. NOTE: This screen displays only if the account's TLA (Tax Lot Accounting) position is in good order (IGO) and cost basis is fully or partially known. If partially known, only known basis lots display. There are two sections you can use to sort the lots: Based on Holding Period and Pre-Fill Selections. By default, No Preference is selected in each section. Optionally, you can select Short-Term (List contracts of an option held less than the minimum holding period (as defined in the option's prospectus) first. These options may be subject to redemption (short-term trading) fees. See the option's prospectus for more information.) or Long-Term (List contracts of an option held longer than the minimum holding period (as defined in the option's prospectus) first. These contracts may not be subject to redemption (short-term trading) fees. See the option's prospectus for more information.) as the Based on Holding Period and/or By Highest Cost (Pre-fill tax lots with the highest Cost Basis/Contract information first.), By Lowest Cost (Pre-fill tax lots with the lowest Cost Basis/Contract information first.), or By Minimizing Gain/Loss (Attempt to identify high Cost Basis and low Cost Basis/Contract. There is no guarantee that gains or losses will be offset, in whole or in part. Results will vary.) in the Pre-Fill Selections area. After making your choice(s), select the Save button to close the pop-up and return to the Specified Contracts screen with the table populated according to the sorting criteria you established.
  4. If you wish to enter the lots manually, select the radio button associated with the lower table to activate it. Enter the number of contracts in the Contracts Specified field, the date the contracts were added to the Fidelity account in the Date Acquired field (NOTE: You can enter the date manually (MM/DD/YYYY format) or use the Calendar pop-up to assist you), and complete the Cost Basis/Contract field. If contracts purchased were over multiple dates or at different prices, you may split the lot into multiple lots. For example, if the quantity with unknown cost basis is 200 contracts, which represent two separate purchases of 100 contracts each, enter cost basis for the first 100 contracts, then enter cost basis for the remaining 100 contracts in the next row. Fidelity provides cost basis and associated realized gain/loss information as a courtesy service. Such information may not reflect all adjustments necessary for tax reporting purposes. Continue adding contracts until you reach the limit or the desired number (equal to or less than the limit). NOTE: Running totals display below the table and update dynamically as you enter values. Contracts Specified plus Contracts Remaining (also known as unspecified contracts) must equal Total Contracts in Order. Any contracts in the order left unspecified are depleted FIFO.
  5. Regardless of whether you followed one of the processes described in Step #3 or the process described in Step #4, when you finish specifying the contracts, select the Verify Order button. NOTE: If you wish to make any changes to the fields on the Order Ticket itself, select the Edit Order button to display the ticket so you can make the desired modifications. The Specified Contracts screen maintains you selections.
  6. When you select the Verify Order button, the system checks for errors that may prevent sending the trade to the market. An order verification window displays and you can use it to review the trade details before you proceed with the order. If no errors are indicated, select the Send Now button to send the trade to the market and place it in the Sent Orders List. NOTE: Notice that in the case of specifying contracts in an order, you cannot save this order to the Unsent Orders List; you must either send it to the market or close the ticket without sending it.

Column Definitions

Column Definition
Contracts Specified For specific contract trades, if you are using the cost basis information that Fidelity is tracking, you can enter the quantity of contracts from each tax lot you wish to specify in the Contracts Specified column.
Contracts Available If using cost basis information that Fidelity is tracking, a list of all tax lots for the position displays. Each tax lot has an available quantity that you may select; this quantity displays in the Contracts Available column.
Date Acquired The date on which the contracts are added to the Fidelity account, in MM/DD/YYYY format.
If you originally acquired contracts through this account, the Date Acquired is the trade date.
OR
If you acquired the contracts in an online trading account at another brokerage firm and transferred the contracts to this Fidelity account, the Date Acquired is the date Fidelity received the contracts. For example, if you bought the contracts at another brokerage on 08/15/2008 and transferred them to this Fidelity account on 09/30/2008, the date acquired defaults to 09/30/2008 unless you update the information.
Lot Basis The total cost basis¹ of contracts in the position, which is calculated from Contracts Available X Cost Basis/Proceeds per Contract.
Cost Basis/Contract The calculated cost of one contract of the security. Cost basis¹ is generally the original amount paid for contracts of a security, including the amount of reinvested dividends and capital gains, plus or minus certain adjustments, such as fees and commissions paid at the time of purchase. If the position is held Short, this amount represents the proceeds per contract.
Unrealized Gain/Loss The hypothetical value of the gain or loss¹ that would be realized if contracts were sold at the indicated price.
Holding Period How long the contracts were held since their acquisition date:
  • Short. Contracts were held one year or less.
  • Long. Contracts were held longer than one year.
  • Fractured. Contracts were held for a combination of holding periods. For positions tracked at lot level, fractured lots are always the result of wash sales.
  • Unknown. Fidelity has no record of the holding period.
NOTE: For stock option grants, this refers to the amount of time stock options must be held before they can be exercised. The holding period requirements for stock options are described in the vesting schedule for your stock option grant.
Cost Source The origin of the cost basis¹ information for a position. Options are:
Fidelity: Fidelity is the originator of the cost basis information for the position.
OR
Customer: You or your authorized agent (accountant, attorney) furnished Fidelity with the cost basis information.

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Options Order Ticket Field Definitions

Field Definition
Account Type Selects the type of account involved in the order; selections are: Cash (the default) and Margin.
Action Drop-down list used to specify the type of order; selections are: Buy Calls to Open, Buy Calls to Close, Buy Puts to Open, Buy Puts to Close, Sell Calls to Open, Sell Calls to Close, Sell Puts to Close, and Sell Puts to Open.
NOTE: No selection (the default).
Client Confirm Note

Designates the power of discretion for this action; selections are: Advisor Directed, Client Requested, Cross Trade. This information displays on the trade confirmation.
NOTE: No selection (the default).

Limit/Stop Displays the limit price or the stop loss/limit price for the order. NOTE: Displays only when adding Equity and Options orders and is disabled if you selected a Price Type of Market.
Price Type Selects the price type for the order; selections are: Limit, Market (the default), and Stop Loss.
Quantity Indicates the quantity of the order. For Options orders, displays in Contracts and must be a whole number greater than 0.
Special Conditions Displays special order conditions; selections are:
  • Blank (Null)
  • All or None: An order instruction specifying to either fill the entire order or do not fill any of it. Making an all-or-none designation restricts the order. The stock can trade at or below your price on a buy, or at or above on a sell, without the right to execution, unless the entire amount of the order is executable.
NOTE: No selection (the default).
Specific Contracts Provides you with the ability on a closing transaction to deplete specific tax lots within the account. The field is associated with two radio buttons: Yes and No (the default). Selecting Yes, allows you to to identify which contracts to sell and when to sell them. If you select Yes, the Vs Purchase field is removed.
NOTE:
  • This field is entitled and supports Single Leg Option orders only.
  • Please see the Specific Contracts section above for additional information.
Symbol/CUSIP The Symbol or CUSIP of the security for the order. The available entries are filtered according to the Action of the order you are creating.
Time In Force Selects for how long the order is valid; selections are:
  • Day (the default): An order instruction specifying that the order can be filled at any point during that day.
  • Fill or Kill: An order instruction specifying that the order be filled in its entirety or canceled immediately. The order cannot be partially executed. A customer enters a Fill or Kill order at the current bid or ask when the bid or ask size shows fewer available contracts than the customer wants to trade and the customer will not accept less than the desired number of contracts.
  • Immediate or Cancel: An order instruction specifying that any part of the order be filled immediately and any remaining portion be canceled. A customer enters an Immediate or Cancel order at the current bid or ask when the bid or ask size shows fewer available contracts than the customer wants to trade, but the customer is willing to accept as many contracts as are currently available.
NOTE: No selection (the default).
Transaction Disposal Method

NOTE: Only displays if the Action is Buy Calls to Close, Sell Calls to Close, Buy Puts to Close, or Sell Puts to Close.

Optionally used to select an alternative cost basis disposal method or Specify Contracts for this trade only. NOTE: The method you designate on the ticket is used for this specific order and does not replace the account's established cost basis disposal method. Also, the Transaction-Level Disposal Method Override does not apply to the following cases:

  • Opening Transactions
  • Retirement Accounts
  • Account Type 0 (DVP/RVP)
  • Account Positions with an Average Cost Disposal Method
Vs Purchase

Indicates the versus purchase date of the order for tax lot accounting purposes. This information displays on the trade confirmation.

NOTE: Displays for the following "closing" order Actions: Buy to Cover, Buy Calls to Close, Sell Calls to Close, Buy Puts to Close, and Sell Puts to Close.

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Terminology

Calls

Represent the right, but not the obligation, to buy an underlying security at a specified price for a specific time period.

Transaction Buyer Writer
Opening Buy Calls to Open Sell Calls to Open
Closing Sell Calls to Close Buy Calls to Close

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Delta

The sensitivity of an option's theoretical value to a change in the price of the underlying contract.

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Implied Volatility

A reflection of the market place's current expectation of future volatility.

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Puts

Represent the right, but not the obligation, to sell an underlying security at a specified price for a specific time period.

Transaction Buyer Writer
Opening Buy Calls to Open Sell Calls to Open
Closing Sell Calls to Close Buy Calls to Close

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NOTE: See the following related topics for additional information on trading:

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¹ Fidelity provides certain cost basis and holding period information to you and to the IRS on your annual Form 1099-B and provides other cost basis and associated realized and unrealized gain/loss information to you as a courtesy. Such information may not reflect all adjustments necessary for tax reporting purposes. Taxpayers should verify cost basis, associated gain/loss information provided by Fidelity against their own records when calculating reportable gain or loss resulting from a sale. Although Fidelity reports certain cost basis information to the IRS, Fidelity is not responsible for your use of this information in meeting your federal, state, and other tax obligations. Fidelity makes no warranties with respect to, and specifically disclaims any liability arising out of your use of, or any tax position taken in reliance upon, Fidelity-provided cost basis and gain/loss information.

Fidelity determines the appropriate cost basis method for calculating gain and loss based on positions held at the time of sale. Unless otherwise indicated, Fidelity determines cost basis using the average cost-single category (ACSC) method for open-end mutual funds. For securities other than open-end mutual funds, Fidelity determines cost basis using the first-in, first-out (FIFO) method if Fidelity does not receive appropriate specific share instructions. Fidelity determines cost basis using the specific share identification (SS) method if Fidelity receives appropriate specific share instructions; however, such cost basis information may not correspond to a client's cost basis information records if a client used the specific share identification method prior to the time that such method tracking was make available by Fidelity.

Clients should consult with their tax advisors for further information.

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