The exact error message is as follows:
(354016) Your order will leave your account with an uncovered option position in cash. Please review your order.
What Error 354016 Means
Error 354016 is a safety check on the order ticket. When you sell an option to open, you take on an obligation. Fidelity checks whether your account already holds what it would need if you’re assigned:
- Covered call: you need 100 shares of the stock for each call contract you sell. This is the requirement in Fidelity’s covered call and cash-secured put walkthrough.
- Cash-secured put: you need cash equal to the strike price times 100 shares for each put contract. In Fidelity’s example, an $80 strike means an $8,000 obligation.
If the check fails, the order is treated as uncovered and Fidelity blocks it. Fidelity’s options FAQ lists selling uncovered calls and puts in its third and highest tier of options approval.
Why Your “Covered” Trade Looks Uncovered
These are the causes readers most often report when they are sure they own the shares. We have not seen Fidelity publish an official list, so treat them as things to check, not a guaranteed diagnosis.
1. Your shares are already committed
Shares that are already covering another short call, or that are tied up in an open sell order, may not be available to cover a new call. Check Activity & Orders for open sell orders on the same stock, and for calls you have already sold against those shares.
2. You have the wrong account selected
Each Fidelity account is checked on its own. If your shares are in a brokerage account and the trade ticket is set to your Roth IRA, the shares won’t count. Confirm the account dropdown on the ticket.
3. The contract count is too high
One contract covers 100 shares. If you own 150 shares and try to sell 2 calls, the second contract is uncovered. Sell 1 contract, or buy more shares first.
4. Not enough cash for a put
If you are selling a put, check the cash available in that account against strike × 100 × number of contracts. Money that is pending, or already committed to another order, may not count.
5. You may have sold to open when you meant to close
Selling an option you don’t already own opens a new short position. If you meant to sell an option you hold, choose Sell to Close instead.
How to Fix It (Step by Step)
- Open Activity & Orders and cancel any open sell order on the same stock, if you don’t need it.
- Confirm the account on the trade ticket is the one holding the shares or cash.
- Check the math: 100 shares per call contract, or strike × 100 in cash per put contract.
- Confirm you chose Sell to Open or Sell to Close correctly.
- Reduce the number of contracts and try again. If a smaller order goes through, the original order wasn’t fully covered.
- If it still fails, call Fidelity Customer Service at 800-343-3548 and give them the exact error text. They can see what is holding your shares or cash.
Seeing “(354014) Exceeds Your Option Level” Instead?
(354014) Your order will leave your account with an option position that exceeds your option level. Please review your order.
This is a different error. It means the strategy needs a higher options approval than your account has. Fidelity’s options FAQ describes three tiers:
| Tier | What it allows, per Fidelity |
|---|---|
| Tier 1 | Covered calls (including buy-writes), buying calls and puts, selling cash-secured puts, long straddles and strangles |
| Tier 2 | Everything in Tier 1, plus spreads (up to 4 legs) and covered puts |
| Tier 3 | Everything in Tier 2, plus selling uncovered calls and puts and short straddles |
If your strategy is above your tier, you need to be approved for a higher one. Options approval is a separate application, so ask Fidelity about it, and see our guide to getting approved for a higher options level on Fidelity. Selling uncovered options carries substantial risk, and for calls the potential loss is unlimited, so make sure you understand it before applying.
Related Fidelity Options Guides
- How to sell covered calls on Fidelity
- Can you sell covered calls in a Fidelity 401(k)?
- Fidelity error 100963: restricts certain opening option transactions
- Fidelity error TC9052: not permitted to open transactions
Related guides
- Fidelity Error 354018: How to fix the “sell put option” error
- Fidelity Error 340036: Can’t Trade OTC Stocks — Fix It (2026)
Frequently Asked Questions
What does Fidelity error 354016 mean?
Your order would leave a short option position that isn’t fully backed by shares (for a call) or cash (for a put). Fidelity blocks it and asks you to review the order.
Why does Fidelity say my covered call is uncovered?
Common reasons are an open sell order or another short call using your shares, the wrong account selected on the ticket, or selling more contracts than you have 100-share lots. Check Activity & Orders first.
How many shares do I need to sell a covered call at Fidelity?
100 shares of the underlying stock for each call contract you sell.
What is the difference between 354016 and 354014?
354016 says the option position would be uncovered. 354014 says the position would exceed your option level, so the fix is a higher options approval, not more shares or cash.