Can you sell ETFs and stocks short on Fidelity Investments? Fees and requirements. Does Fidelity offer inverse ETFs and buying put options?

Shorting Stocks at Fidelity

With $0 commissions and a very good desktop platform, Fidelity Investments is a great broker not only to buy stocks but also to sell them. If you’re bearish on a particular investment, you’re going to show you everything you need to know to take a short position with this broker.


Research at Fidelity

To find a stock that is overbought, we recommend starting with Fidelity’s resources. Start on the website by clicking on “News & Research” in the top menu and then selecting “Stocks.” On the next page, Fidelity will present some bearish stock trade ideas based on research from Zacks and Recognia.


Fidelity Short Stocks


If you don’t care for any of these choices, you can do your own screen by clicking on “Stock Screeners” in the left-hand menu. On the next page, be sure to click on the blue “Start a Screen” button to get the initial scan page.

With Fidelity’s screener, it’s possible to search by P/E ratio, volume, dividend yield, PEG ratio, price performance over the past 52 weeks, company growth, technical events, and many other issues that short sellers will find pertinent.


Using Bearish Analysis

Fidelity’s stock search page also presents recent downgrades. To find this resource, look in the right-hand column under “Today’s Events” and click on “Downgrades.” On the day we did our research, we found 207 analyst downgrades. Some of the analysts grading the stocks include Wells Fargo, Jefferies, and Merrill Lynch. One example of a downgrade we found was for Dick’s Sporting Goods by Raymond James.

If you prefer to do your own research, Fidelity has you covered there as well. The investment firm offers free stock reports in pdf format from a variety of analysts, such as Ford Equity Research and Argus.


Setting up Your Account

To place a short trade at Fidelity, you’ll first need to add margin to a nonretirement account. To do so, click on “Margin” under “Brokerage & Trading” within “Account Features.”


The Cost of Shorting on Fidelity

Margin interest may be owed on short sales at Fidelity. The broker’s interest rates vary from 6% to 10%, depending on the amount owed. Stocks that are hard-to-borrow could be subject to additional fees. Many firms charge less for margin - see Broker Margin Rates.


Short Locate

Fidelity has an online short locate feature. After logging into your account, you can enter a ticker symbol and see the number of shares that are available to short and the cost to maintain the short position.


Placing a Short Trade on the Website

To short a stock on Fidelity’s website, go to the stock’s profile page and click on the “Sell” button. It’s located in the upper-right portion of the screen. After clicking on the button, you’ll see the broker’s trade ticket appear in the left-hand side of the monitor. Select “sell short” as the action and the order type (market or limit). After you submit your order, you can enter a stop loss buy order to minimize any potential loss.


Shorting on Active Trader Pro

If you prefer to trade with a desktop program, Fidelity offers Active Trader Pro. There’s no cost to use it, and we found it to be user-friendly during our testing. To short a stock, just click on the trade icon in the upper-left portion of the platform. It has two horizontal arrows. Then enter the ticker symbol of the stock in the trade window and select “sell short” as the action. The trade ticket has the same choices the website offers.


Comparison

Fidelity isn’t the only brokerage house to offer $0 commissions on equities. tastyworks, Robinhood, TD Ameritrade, and Schwab are a few others.

But trading tools vary immensely. We found Fidelity’s website and desktop software to be far better than anything Robinhood offers. And while tastyworks does have some good software for trading options, the company’s stock trading tools underperform Fidelity’s.

For short traders a good alternative broker is Webull. It has a number of advantages over Fidelity: $0 commissions on options trades, lower margin rates, virtual (paper) trading, and easier to learn trading tools.


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Open WeBull Account

Webull


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