Approved for Level 2 options. Why can’t I sell a cashsecured put and a call spread at the same time?
Summary of User Concern and Solutions:
- The main problem reported by the user is the inability to execute a combined order for selling a cash secured put and a call spread, receiving an error message that the order exceeds their option level, despite being approved for both strategies.
- A suggested solution is to change the trade type from “margin” to “cash” when placing the cash secured put order, which may resolve the error encountered.
- The user is encouraged to contact customer support for a review of their specific account in a secure environment, either through direct messaging on social media or via the provided contact link.
Here’s the full thread
I’m approved for level 2 options in my Roth IRA, so I am able to sell cash secured puts (CSP) and spreads.
If I try to sell both a CSP and a call spread in the same order, I get an error (354014) Your order will leave your account with an option position that exceeds your option level. Please review your order.
However, if I break the trade up into 2 separate orders then I’m allowed to place the trade. However, it uses up too much buying power.
For example, assume the same underlying and all options have the same expiration. I am able to sell a 40 put that uses up $4,000 in buying power. I can then sell a 40/41.5 call spread that uses an additional $150 in buying power. This makes no sense since the underlying stock cannot be under $40 and above $40 at the time of expiration. It’s impossible for both the put and the call spread to be in the money.
It doesn’t make sense to me why 1. I can’t do all of the legs in 1 trade if I have approval for each individual leg and 2. Why this trade uses up more buying power than necessary.
Thanks for dropping by this afternoon, @Xerlic.
Based on the screenshot you shared, the error message indicates you have been attempting to place your cash secured put order in type margin. This is the default setting for margin accounts; however, when attempting to setup a cash covered put specifically, you’ll need to manually change the trade type from “margin” to “cash.” Just click on the “Trade Type” box and use the dropdown menu to adjust accordingly.
That said, in this situation, it would be best if we could review your particular account in a secure environment. As we cannot connect here on Discord specifically, feel free to use our contact information below to reach out to us, or send us a quick DM on a social media platform such as Facebook or Twitter, and we’ll be happy to follow up with you there.
Contact Us: https://www.fidelity.com/customer-service/contact-us
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