Fidelity Error (040989) Invalid debit/credit order type

Someone asks:

I have a covered call option opened in my Fidelity account. I was given this trade error when I tried to roll the covered call.

(040989) Invalid debit/credit order type. This order requires a credit (amount to be received) because the process of the sell option is more than the cost of the buy option.

A Net Credit occurs when you write a call option with a larger premium than the call option you’re closing.

To fix the Fidelity error (040989), here is what you need to do.

  1. Buy to close (BTO) your current order.
  2. Sell to open (STO) a new call option.

Rather than rolling (which involves only one transaction), you’re doing this as two separate orders.

Be sure to select the strike and expiration date of your choosing.

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