OK, so trust may be the wrong word, but Fidelity is definitely getting your pricing wrong. I don’t think it’s intentional, because why would they be intentionally deceiving or upsetting their customers? My take on this is that their brokerage tools are just poor…they are not set up primarily for options traders. Unfortunately, some of us (me included) are tied to Fidelity because we are trading in IRA accounts that we are restricted from freely taking money out of. So, in this post we are going to get into what the situation is with Fidelity and how we work around it. When Fidelity calculates your “Total G&L %”, you’d expect it to be reasonably correct, but it is often nowhere near. This can lead to confusion, frustration, and uncertainty about when to close out positions. Some positions can even look like losers to Fidelity, even when they are currently winners. I will show some examples below and provide additional context.
First, we need to get into a core options concept. One of the most common points of confusion I see from options traders, especially those newer to trading, has nothing to do with strategy selection, Greeks, or trade execution. It’s something far more basic:
Bid-Ask pricing.
If you don’t understand how Bid-Ask values work (and how your trading platform uses them), Fidelity can make perfectly healthy trades look like disasters. This is especially true when trading Put Credit Spreads, and even more so on some of our less liquid underlyings.
Today, we’re going to break this down:
- What Bid and Ask prices really mean
- Why tight Bid-Ask spreads are better
- Why some platforms (notably Fidelity) show wildly inaccurate P&L
- How this can cause traders to exit trades far too early
This isn’t about blaming Fidelity: it’s about understanding the mechanics so you don’t let bad pricing math sabotage a good trade.
What Is the Bid-Ask Spread?
Every option has two prices:
- Bid – the highest price someone is willing to pay
- Ask – the lowest price someone is willing to sell
The difference between these two prices is the Bid-Ask spread.
If an option shows:
- Bid: $1.00
- Ask: $2.40
The Bid-Ask spread is $1.40. That spread represents an insight into liquidity and uncertainty, not value. The real market value of the option is somewhere in between, typically around the mid-price. To calculate the mid-price you simply add the Bid and Ask values together and divide by 2:
- Mid-price = ($1.00 + $2.40) ÷ 2 = $1.70
When valuing positions, we need to think in mid-prices, not Bid or Ask.
Why Tight Bid-Ask Spreads Help in Options Trading
A tight Bid-Ask spread means:
- More liquidity
- Easier price discovery
- More accurate P&L
- Efficient entries and exits
A wide Bid-Ask spread means:
- Fewer participants
- Sloppier pricing
- Larger distortions in displayed profits and losses
This matters enormously for Put Credit Spreads, because you’re not just pricing one option, you’re pricing two simultaneously. If either leg has a wide spread, the distortion is seen. If both legs have wide spreads, the distortion compounds.
How Put Credit Spreads Are Typically Priced
When you open a Put Credit Spread, you:
- Sell a higher strike Put
- Buy a lower strike Put for protection
To evaluate the real value of that spread at any moment, most options trading platforms use:
- Mid-price of the short Put
- Mid-price of the long Put
- Subtract one from the other
That gives you the true mid-price of the spread, which is what actually matters for:
- P&L
- Stop loss triggers
- Trade management
What Fidelity Does (and Why It’s a Big Problem)
Here’s where things break down for traders using Fidelity. When the market is open (and after hours) Fidelity does not use mid-pricing for open spread positions when calculating their “Total G&L %” and “$ Total G&L”. Instead, they use:
- The Ask price on the short Put you sold
- The Bid price on the long Put you bought
This is literally the worst possible pricing combination for a Put Credit Spread as you are getting unrealistic prices on both legs. Let that sink in. They assume:
- You would have to buy back your short Put at the most expensive price, and
- You sell back your long put at the cheapest possible price
That is not realistic. That is not how spreads trade: and it dramatically overstates losses, particularly with wide Bid-Ask spreads.
Why This Is Especially Bad for Less Liquid Underlyings
This problem becomes even more severe on our less liquid underlyings (like USO, IYR and XBI). These underlyings:
- Are still tradable
- Fit well into our diversified system
- Often have much wider option spreads than SPY or QQQ
When Bid-Ask spreads widen on these, that is when Fidelity’s pricing distortion explodes. For these less liquid underlyings, the Bid is often $0.00. Even for trades that are performing well, I’ve seen situations where:
- Fidelity shows a -600% or -1000+% loss
- While the actual mid-price loss is significantly smaller or is even a winner
- The trade is behaving completely normally and will likely be a winner
To a trader, this looks like:
“I hit my 200% stop loss, I need to close!”. Not so fast, you actually don’t. Let me bring this home with an example and go step-by-step.
Example screenshot of my account after hours on 2/4/2026:
In this example, the trade has not failed: Fidelity’s pricing math has. Currently, IYR sits at $96.36. The Put I sold is at $93. IYR would have to drop 3.6% for me to breach the strike price. Additionally, time is running out on this trade. There are only 7 trading days left before expiration. In reality, the majority of the theta decay has already occurred on this trade, and our delta is currently OK at -0.28. Now, if we look at the true, calculated mid-price on this option, it is at $2.40 = $4.80 (Ask) – $0.00 (Bid) / 2. Additionally, if we calculate the mid-price on the $88 Put, we get the same value of $2.40. Therefore, to calculate the true mid-price of the Put Credit Spread, we subtract $2.40 – $2.40 = $0. Now $0, is not actually correct either. The true value is likely around $0.15 based on my experience. As you can see, we entered the trade for a $0.31 credit, and now the value is around $0.15 so we would need to pay around a $0.15 debit to close out this position. If we did that, it would be a 51% winner!!! But, instead, Fidelity is making you think you have a -1,369.10% loss on your hands.
So, here’s how they calculate the loss: for the 93 Put, they use the Ask price on the short Put you sold at $4.80, and the Bid price on the long Put you bought at $0.15 (although the screen is reading $0.00). So they calculate a $4.65 loss x 15 contracts for a $6,975 loss! Against an original credit of $474.78, that’s an outrageously incorrect -1,369.10% loss.
This Breaks Our Stop Loss Rules
In the Put Path system, we use:
- Defined risk
- Mechanical rules
- A 200% stop loss versus credit received
That rule is designed to:
- Protect capital
- Limit damage due to extreme loses
- Remove emotion by providing a line in the sand to trigger a trade
But if Fidelity is artificially inflating losses, the stop loss would trigger far too early. If we were to trust Fidelity’s pricing, it would potentially lead to:
- Premature exits
- Lower win rates
- Unnecessary realized losses
- Loss of confidence in the system
The trader thinks:
“I followed the rules, the stock cooperated, and still lost.”
In reality:
“The trade was operating as expected, but Fidelity’s pricing input was wrong.”
Why Fidelity’s Total G&L % Is the Worst Possible Estimate
To be very clear: Fidelity’s displayed P&L is not “conservative.” It is structurally incorrect and cannot be trusted or taken at face value. It assumes:
- You get filled at the worst price on both legs of your spread
- No negotiation toward mid-price
That is not how real fills work, especially when:
- You close spreads as a single order
- You use limit orders
- You offer your trade near the mid-price (as you should)
The Practical Workaround (What I Tell Students to Do)
Until you gain enough experience where you can calculate approximate options values in your head or Fidelity fixes this (and they may never), here’s the practical solution if you are concerned about a particular position:
If you haven’t already, enter your closing order. If you already have a closing order in, then go to replace that order with a $0.02 or $0.01 debit order. Create a closing order for the full spread. This immediately shows you the approximate mid-price of the spread. From there you can calculate the realistic P&L, then determine whether you are actually near your 200% stop loss. As you can see in the example close order below, the current mid-price (Midpoint) is showing $0.00, so there is no reason to fear!
To be clear, this is not a “hack”. This is how we have to validate pricing if we get concerned about a position in Fidelity. You are simply forcing the platform to show you reality. Now, in this example, most likely the mid-price is around $0.15, so that’s far closer to $0.00 than $4.80. If you actually needed to close this trade, you could start at $0.01 and walk it up until you get filled.
Alternatively, you can let Fidelity sleep on it. This is not a great option because we need to make decisions in real time, but you can do both. You can find the approximate mid-price and do the math yourself (recommended), and then follow up with a next morning sanity check. So fast forward to the next day: for some reason, Fidelity uses the “Last” price (typically) to price their options pre-market. This is much, much better and you can see in the screenshot below that the Bid and Ask prices are blank. So they are using Last $0.32 to price a Market Value of $480 (15 x $0.32) for the 93 Put, and also using $0.15 still for the 88 Put. So this position is currently valued at +46.29%, which is about what we thought based on our previous day’s calculations! It is great that we didn’t panic and enter in a high price stop loss order.
Why This Matters for Discipline and Confidence
One of the most dangerous things in trading is not losing individual trades, it’s systemic false feedback. If Fidelity constantly tells you:
- You’re losing more than you are
- Your strategy is failing when it isn’t
- Your stop losses are being hit when they’re not
You will:
- Lose trust in the system
- Break the 200% rule
- Possibly abandon the Put Path process entirely
Understanding Bid-Ask mechanics protects you from that. Using other trading platforms like Tastytrade and Robinhood protects you from that as well. Those platforms show you pricing that will calm your nerves if you have similar positions on in Fidelity that are misrepresented.
The Bigger Lesson
This is why I emphasize mechanics so heavily. Markets are uncertain. Pricing is imperfect. Platforms make assumptions. Your job as a trader is not to react emotionally to calculations on a screen—it’s to understand how those numbers are generated. You need to have some basic rules of thumb in your mind to validate what you are seeing. If Fidelity is telling you that you have a 400% loss on an underlying that has gone up 2% over the life of the trade and the DTE is down to 6, you have a winning trade that Fidelity is giving you a bad profit estimate on. This will take experience and some know-how, but once you have it, a lot of fear disappears. Fidelity could at least use the “Last” price all day long, which at least would be closer to reality, but they do not so let’s not stress about it. Also, you have to know when to recognize bogus orders as well. Clearly, no one is paying $4.80 to buy that 88 Put in IYR, but someone or some market maker has entered that trade in so the system lists it as the Ask. The unfortunate reality is that sometimes you have to calculate your true P&L manually when using Fidelity, in order to understand how your position is performing.
Final Takeaway
Since we are trading Put Credit Spreads, it’s essential that you:
- Understand Bid vs Ask
- Think in mid-prices
- Never blindly trust displayed Total G&L % in Fidelity
The Put Path Options Trading System can look awful in Fidelity when their pricing mechanics are misunderstood. Just remember in Fidelity, they are giving you the worst possible scenario on both ends of your spread, which is unrealistic and can vastly distort prices and therefore underestimate the $ value of your positions. The Put Path works because it’s structured, risk-defined, and mechanical: don’t let Fidelity’s bad pricing math convince you otherwise. Fidelity does a lot of things well, but this is a platform flaw that we need to deal with intelligently. Sometimes it is hard to sleep at night given how Fidelity prices your trades, so it’s important that you understand them on a deeper level and double check what the true value is, using actual math. Trade calmly. Trade mechanically. Trust the process! Please leave a comment or question below, particularly if you have a better way to avoid this issue in Fidelity!
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