Unlocking the Power of Put Debit Spreads with Fidelity: A Tutorial

How to execute short debit spreads aka put debit spreads

Jul 21, 2023 at 10:54 AM
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    As Schaeffer's Investment Research is not affiliated with Fidelity, this article can only provide general steps on how to buy a call debit spread on Fidelity. However, keep in mind that financial processes and platforms may change over time, so it's always a good idea to double-check with the latest information from Fidelity or consult a financial advisor if you're unsure about any options trading strategy.

    Bernie Schaeffer has recently launched two new debit spread trading programs (Vertical Options Trader and Grand Slam Countdown) in which our members can take advantage of the powerful debit spread strategy. Both programs offer call debit spreads and put debit spreads. We will discuss buying put debit spreads with Fidelity here, but you can review how to buy call debit spreads with Fidelity by clicking here.

    Here is how to buy a put debit spread (aka a put vertical spread) on Fidelity's platform:

    Step 1: Open and Log In to Your Fidelity Account

    If you already have a Fidelity account, log in. If not, sign up for a new account and complete any necessary verification processes.

    Step 2: Access the Trading Platform

    After logging in, navigate to the Fidelity trading platform. The platform may differ depending on whether you're using Fidelity's website or their Active Trader Pro software. Ensure you have the appropriate access.

    Step 3: Find the Underlying Stock

    Using the search bar or browsing through the available options, find the underlying stock for which you want to buy a put debit spread. Once you select the stock, you'll be able to view its trading details and options.

    Step 4: Select the Put Option for the Long Leg

    Within the options chain, locate the specific put option you want to use as the long leg of your put debit spread. The long leg is the put option you're buying. Click on the ask price of the put option to open an order ticket.

    Step 5: Choose the Put Option for the Short Leg

    To create a put debit spread, you'll also need to sell a put option with a lower strike price than the one you're buying. Locate the specific put option you want to use as the short leg. Click on the bid price of the put option to open an order ticket.

    Step 6: Set the Number of Contracts and Review Order Details

    In the order tickets for both the long and short put options, specify the number of contracts you want to trade. Review the order details, including the strike prices and expiration dates of both options, to ensure they align with your desired put debit spread strategy.

    Step 7: Place the Trade

    Once you've reviewed all the order details and are satisfied with your selections, click the appropriate button to place the trade. On Fidelity, this is typically labeled as "Preview Order" or "Place Order." Follow any additional prompts or confirmations to complete the trade.

    Step 8: Monitor Your Position

    After placing the put debit spread trade, you can monitor it within your Fidelity account. Keep track of the trade's performance and manage it according to your investment strategy.
    Remember, options trading involves risks, and it's crucial to have a good understanding of options strategies and associated risks before engaging in such trades. If you're new to options or need further guidance, consider seeking advice from a qualified financial advisor or utilizing Fidelity's educational resources and support.


    Learn better through video? Here is a great video that we found on YouTube that will visually walk you through placing a call debit spread on Fidelity's Active Trader Pro:


    SIR is not affiliated with any brokerage firm and does not endorse or recommend any specific brokerage firm. SIR is not and will not be responsible for any trades made by a broker on the subscriber's behalf under any circumstances.


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