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.
- Buy to close (BTO) your current order.
- 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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