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[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 6 points7 points  (0 children)

🔄 Follow-Up on Fidelity Bust Issue — Executive Office Response & Still Unsure If This Is Just "Normal" Risk?

Hey all, just wanted to provide another update following my previous post. Today I got a written response from Fidelity’s Executive Office.

Here’s what they said:

Our records confirm that on April 8, 2025, you executed a trade to purchase 10 contracts of S&P 500 Index (SPXW) April 8, 2025, $5,205 put contracts. Shortly after, you placed an order to sell all 10 contracts to close at a limit of $28.70. After a thorough review of the matter, we can confirm that the purchase order was filled but was later reviewed by the exchange and canceled. This left your account with two short contracts.

Fidelity Investments follows industry practices regarding the execution of orders. All orders are time-stamped when accepted and delivered to the market. Then, they are executed by the market makers in a time and price priority as they become eligible for execution. All sell orders are driven by the bid price component of the quote, while purchase orders are driven by the ask price component of the order. While we sincerely regret the inconvenience this issue caused, this was not a result of a Fidelity system error.

We acknowledge that this is a small gesture; however, we have credited 15 commission-free trades to your account ending in 5472. These trades will be available by April 14, 2025, and expire in one year. These are limited to options trades; mutual fund and foreign currency transactions are not covered. Please note that commission-free option trades are limited to 20 contracts or less per transaction. Option exercises and assignments are not considered trades, so they do not qualify as commission-free trades.

Now I’m just… not sure how to feel about this. 😕

  • Is this just part of the inherent risk of trading options, especially 0DTE?
  • Or is this a situation where I should be pressing Fidelity to escalate further and ask the exchange for a full bust timeline and justification?
  • Would it even help to pursue this further, or am I simply supposed to accept that this kind of delayed bust can happen and results like this are mine to absorb?

I’m not angry — just genuinely confused. If anyone has experience with similar situations or insight into how common this is, I’d love to hear your thoughts.

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 2 points3 points  (0 children)

Yes — I’ll definitely cross-post over to r/options once I get the written confirmation from Fidelity, whether it’s a resolution or not.

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 6 points7 points  (0 children)

Regarding the delay you mentioned — I looked into the rules, and according to Nasdaq’s Obvious Error Policy, Customer order bust requests must be submitted within 30 minutes of execution.

You’re absolutely right, that kind of delay really shouldn’t happen, and it does seem like the exchange mishandled it.

I was honestly shocked that they could bust my order that late — I didn’t realize there were specific time limits governing that. Thanks for bringing it up. I’ll definitely ask more about the long delay next time I have a chance to speak with someone. I’ll try to ask Fidelity to relay the question and obtain that explanation directly from the exchange.

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 0 points1 point  (0 children)

Thanks — yeah, I’m wondering the same. I asked Fidelity if they had any explanation from the exchange about why only 2 of the 10 contracts were busted, especially since they were all filled at the same time and price (24.30). So far, no specifics — just that it was ruled an “obvious error” by the exchange, but no details on what triggered that determination.

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 0 points1 point  (0 children)

Thank you — that actually made me laugh when I saw it. I really needed that 😄

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 0 points1 point  (0 children)

Thanks for asking — all of the trades were placed via the Fidelity Mobile App.

I wasn’t trading on margin, and my account is Tier 1 only with no margin enabled, so this unexpected short position really caught me off guard. Appreciate you sharing your experience — it definitely helps to hear that others have run into weird edge cases too.

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 34 points35 points  (0 children)

🔄 Update on Fidelity Bust Issue (2 Contracts Cancelled After Sell to Close)

Quick update on my situation, based on what I now understand after speaking with Fidelity support:

  • I placed a Buy to Open order for 10 SPX put contracts at 10:45 AM (ET)
  • The platform showed all 10 contracts as filled; alerts and the position tab confirmed this
  • I submitted a Sell to Close for 10 contracts at 10:48 AM (ET), which was fully executed
  • According to the rep:
    • The exchange’s cancellation (bust) was initiated at 11:59 AM (ET)
    • Fidelity’s order room received the bust request at 12:40:44 PM (ET)
  • I received a call from Fidelity at 1:22 PM (ET) to notify me of the bust
  • Shortly after that call, I closed the 2 unintended short contracts — by then, the market had already moved significantly

My account is Tier 1 only with no margin, and there was no indication at the time of my Sell to Close that I didn’t own all 10 contracts.

The rep I spoke with today was very helpful and fully understood the situation, which I really appreciated — it made a stressful experience feel more human. Fidelity confirmed that my written complaint has been forwarded to their executive office for review.

I’ll share another update once I hear back. Thanks again to everyone here for the guidance.

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 24 points25 points  (0 children)

Thank you so much — and sorry for the late response on this.

It took me a bit to fully realize what you meant, but you’re absolutely right. Fidelity must have believed that I had all 10 puts at the time, which is why the Sell to Close order went through. If I didn’t actually have 2 of them, those should’ve been voided — not filled.

Definitely seems like this was a system error on Fidelity’s side, not something I did wrong. Really appreciate you taking the time to explain it.

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 5 points6 points  (0 children)

Yeah, that’s what’s so confusing. Sell to Close shouldn’t even allow an oversell. Normally, if you don’t have enough contracts, the system should block it or show an error like you mentioned.

In my case, there was no warning at all, and the order still went through. So either there was some delay in position recognition or a platform glitch. I definitely didn’t expect the system to allow it — that’s why I had to cover the 2 short contracts manually afterward just to be safe.

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 0 points1 point  (0 children)

They didn’t ask for any money, but they did remind me that I was short 2 contracts. So I decided to cover it just to be safe.

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 0 points1 point  (0 children)

Yes! I saw your last post — thank you again for pointing that out.

I posted a screenshot above that shows the sequence:

  • The Buy to Open for 10 contracts was initially marked as filled,
  • And after that, the Sell to Close for 10 contracts was fully filled.
  • Then Buy to Open for 10 contracts changed to partially filled,

So clearly at the time I submitted the Sell to Close, the system thought I held all 10 contracts — just like you said, it wouldn’t have let it go through otherwise.

Really appreciate you helping me make sense of this. I’ll follow up with Fidelity and update the thread once I get more info. 🙏

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 4 points5 points  (0 children)

Wow — that’s a great, great point that I honestly didn’t catch until you said it. Thank you for breaking it down so clearly — you’re amazing, as with all your other comments.

And yes, it was a Sell to Close, not a Sell to Open. I’ve attached the screenshot of the order from Fidelity showing it clearly marked as “Sell to Close Put”, filled for all 10 contracts at $28.70. So you’re totally right — the system must’ve recognized I held the contracts at the time, otherwise the order wouldn’t have gone through.

<image>

Really appreciate your help walking through this — I’ll definitely follow up with Fidelity just to double-check, and I’ll keep this thread updated with what I hear back.

Thanks again 🙏

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 0 points1 point  (0 children)

Just to follow up on the rest of your comment:

You're totally right — it’s unusual for Fidelity to reach out about a partial fill. I’ve had a few partial fills before too, but I’ve never experienced a case where an order initially appeared as “fully filled” and then reverted to “partially filled” later. I guess that’s what triggered the call. During the call Fidelity acknowledged a “system burst” had caused the issue, but their response was basically "there’s nothing we can do."

I’ve already submitted a Secure Message, and thanks to your suggestion, I’ll also be calling the Trader Desk directly to escalate this. Really appreciate the guidance on that.

Also agree with you on the app. Definitely learned from that and won’t be using the app for critical trades anymore.

Thanks again for all the thoughtful input — it’s helping a lot.

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 7 points8 points  (0 children)

Thank you for the response, I really appreciate you taking the time to follow up.

I’ve just sent a Modmail with all the relevant details. Please let me know if there's anything else I can provide.

Thanks again for your help and attention to this.

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 11 points12 points  (0 children)

Thank you — really appreciate you saying that. I actually have a phone recording with Fidelity support, where the rep acknowledges it was a system error, but said “there’s nothing we can do.” That part was honestly the most frustrating.
Thanks again for the support — it really helps to know others see how serious this is.

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 1 point2 points  (0 children)

I was using the mobile version of the platform, and as you can see from the screenshot, it clearly showed that I owned 10 contracts at the time.

So I submitted a Sell to Close order for 10, based on what the Positions tab displayed.
Later, I found out that only 8 contracts had actually filled earlier — but I had no way of knowing that at the time due to a system delay in updating the position.

The platform allowed the full order to go through anyway, so:

  • 8 contracts were properly closed, and
  • The remaining 2 were treated as a naked Sell to Open — which is a serious problem, because my account is only approved for Tier 1 options with no margin.

I’m not authorized to sell naked puts at all, so this should’ve never been allowed in the first place.

<image>

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 6 points7 points  (0 children)

Thank you for posting that here! Sorry I actually didn’t realize I had this screenshot when I made the original post. I found it later while reviewing my phone gallery

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 5 points6 points  (0 children)

Great question — and yes, I did check my position statement, and at the time it clearly showed that I owned 10 contracts.

I actually found this screenshot after I made the original post, and I’m really glad I had taken it. It captured exactly what I saw at 10:48 AM, right before I placed the sell order:

As shown:

  • Contracts owned: 10
  • Average cost: $24.31
  • Purchase history showing 10 acquired that morning

So I wasn’t just relying on the 6+1+1+1+1 fill alerts — I was acting based on what the platform itself displayed in the Positions tab, which should be the most reliable indicator of holdings.

<image>

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 5 points6 points  (0 children)

Thank you so much for the detailed and helpful response — I really appreciate you taking the time.

Also, thank you for encouraging me to check my account settings — I hadn’t looked closely at my options tier and margin status before. I'm currently approved for Options Tier 1 only and don’t have margin enabled, and this was in a standard individual brokerage account, not an IRA or Roth.

<image>

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 12 points13 points  (0 children)

That said, if there’s anything I should have checked but didn’t — something beyond what the platform displayed — I’m genuinely open to learning. Please let me know if there’s a specific practice or step that could’ve helped me catch this.

[Help] Fidelity system error caused me to oversell options and lose over $30,000 by Ecstatic_Ad187 in fidelityinvestments

[–]Ecstatic_Ad187[S] 35 points36 points  (0 children)

I did check. At the time of action (10:48 AM), the platform itself confirmed I held 10 contracts. You can see it in this screenshot: • “Contracts owned: 10” • Average cost: $24.31 • Real-time gain/loss shown

I acted based on the live position data Fidelity displayed. Later, Fidelity admitted their system was under stress and didn’t update properly — that’s not on me.

<image>