What option level required for Jade Lizard option in Fidelity?
Summary of User’s Inquiry and Solutions Provided:
- Main Problem: User, Sandra, is inquiring about the options trading tier required to execute a Jade Lizard strategy in her Fidelity accounts.
- Solution: To place a Jade Lizard spread on one ticket, Sandra needs to have options tier 3 due to the short put being categorized as a naked put.
- Alternative Solution: If Sandra is approved for tier 2, she can execute the strategy by placing two separate trades; one as a cash-secured put and the other as a margin trade.
- Additional Resources: Fidelity provided links to review options trading tiers and margin FAQs for further information.
Here’s the full thread
Hello, new here, I was wondering what option level is required for a JADE LIZARD in our Fid accounts. I have a Roth and a brokerage account. thanks
Welcome to the official discord channel for Fidelity Investments, @Sandra! We’re happy to help with your options tier question.
In order to open a Jade Lizard spread on one ticket, you would need to have options tier 3. This is because the short put would be considered a naked put.
While tier 3 is required to place this trade on one ticket, you may be able to place two trades for this strategy if you are approved for tier 2. You would be required to place the spread in type margin, as margin is required for spreads; for the short put, you would need to place the trade in type cash. This put would be considered a cash-secured put, and since you’re required to place the trades in two different trading types, we would not be able to combine the tickets.
You can review the options trading tiers at Fidelity, along with the strategies available for each level, through the link below.
Options FAQs: https://www.fidelity.com/options-trading/faqs
Margin FAQs: https://www.fidelity.com/trading/faqs-margin
If there is anything we can clarify or if additional questions pop up, please don’t hesitate to ask! We’re always happy to help.
Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read the Characteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request. 🟢