Do you have investments on Fidelity that you're ready to sell? Whether you're rebalancing your portfolio, taking profits, or need cash, understanding the process is crucial. Selling investments on Fidelity is a relatively straightforward process, but knowing the nuances of order types, settlement times, and tax implications can save you time and potentially money.
This comprehensive guide will walk you through every step of selling your investments on Fidelity, from logging in to understanding what happens after the sale. Let's get started!
Step 1: Identify What You Want to Sell (And Why!)
Before you click any "Sell" buttons, take a moment to consider what you're selling and why. This initial thought process is vital and can influence your selling strategy.
What type of investment is it? Is it a stock, an ETF, a mutual fund, or an option? The selling process can vary slightly depending on the asset type.
Why are you selling? Are you taking profits after a significant gain? Are you cutting losses on an underperforming asset? Do you need cash for an expense? Your reason for selling can influence your order type and tax considerations.
How much do you want to sell? Are you selling all of your holdings, a specific number of shares, or a particular dollar amount?
Consider the tax implications. Selling investments in a taxable brokerage account can trigger capital gains or losses. We'll delve into this more later, but it's important to be aware of it upfront. Selling investments in retirement accounts (like IRAs or 401(k)s) generally doesn't incur immediate capital gains tax, but withdrawals may be subject to income tax and penalties depending on your age and account type.
Step 2: Log In to Your Fidelity Account
This is the most fundamental step!
Access the Fidelity Website: Open your preferred web browser and navigate to Fidelity.com.
Enter Your Credentials: Locate the "Log In" button (usually in the top right corner) and enter your username and password.
Two-Factor Authentication (2FA): If you have 2FA enabled (which you absolutely should for security!), you'll be prompted to enter a code from your authentication app or a code sent to your phone/email.
Step 3: Navigate to the Trading Platform
Once logged in, you'll need to find where to place your trade.
Find "Accounts & Trade": Look for a menu option or tab typically labeled "Accounts & Trade." This is your gateway to managing your investments.
Select "Trade": Under the "Accounts & Trade" menu, you'll usually see an option for "Trade" or "Place a Trade." Click on this.
Step 4: Select the Account and Investment
Fidelity allows you to manage multiple accounts. Make sure you're in the right one!
Choose the Account: If you have multiple brokerage, IRA, or other investment accounts with Fidelity, you'll need to select the specific account from which you want to sell. This is a critical step to avoid accidentally selling from the wrong account.
Enter the Investment Symbol: You'll see a field where you can enter the ticker symbol of the stock, ETF, or mutual fund you wish to sell. If you don't know the symbol, you can often use a "Lookup Symbol" feature or navigate to your "Positions" tab to find it.
Step 5: Specify the Action and Quantity
Now for the core of the selling order.
Select "Sell": Ensure the "Action" is set to "Sell."
Enter the Quantity:
Shares: If you're selling a specific number of shares, enter the numeric quantity.
Dollar Amount: For some investments, particularly mutual funds, you might have the option to sell a specific dollar amount.
Sell All: There's usually an option to "Sell All" or "Liquidate" your entire holding in that particular investment.
Step 6: Choose Your Order Type
This is where things can get a bit more strategic. The order type dictates how your sell order is executed.
Market Order:
Description: A market order is the simplest and most common. It instructs Fidelity to sell your shares immediately at the best available market price.
Pros: Guaranteed execution. Your order will go through quickly as long as the market is open.
Cons: Price is not guaranteed. In fast-moving markets, the price you receive might be slightly different than what you saw moments before placing the order.
When to use: When speed of execution is your priority and you're comfortable with slight price fluctuations.
Limit Order:
Description: A limit order allows you to set a minimum price you're willing to accept for your shares. Your order will only execute if the market price reaches your specified limit price or higher.
Pros: Guaranteed price (or better). You control the minimum price you'll receive.
Cons: Execution is not guaranteed. If the market never reaches your limit price, your order may not be filled.
When to use: When you have a specific price target in mind and are willing to wait for it. Useful for less liquid stocks or when you want to lock in a certain profit.
Stop Loss Order:
Description: A stop-loss order is designed to limit potential losses. You set a "stop price." If the stock's price falls to or below your stop price, your stop-loss order becomes a market order and is executed at the next available market price.
Pros: Helps protect against significant downside.
Cons: Can execute at a price below your stop price in volatile markets (known as "slippage"). A temporary dip in price might trigger your stop loss, even if the stock recovers later.
When to use: To manage risk and protect profits, especially on holdings you want to keep long-term but want to cap potential losses.
Stop Limit Order:
Description: A stop-limit order combines features of both stop and limit orders. You set a "stop price" and a "limit price." When the stock reaches your stop price, it triggers a limit order at your specified limit price.
Pros: Provides more control over the execution price than a simple stop-loss order.
Cons: Execution is not guaranteed. If the price drops rapidly past your limit price after the stop is triggered, your order may not be filled.
When to use: When you want to limit losses but also want some price protection on the execution.
Step 7: Set Time in Force (Order Duration)
This specifies how long your order will remain active.
Day Order:
Description: A day order is valid only for the current trading day. If it's not executed by the market close, it automatically expires.
When to use: For most short-term trades where you want a quick execution or don't want the order hanging over multiple days.
Good 'til Canceled (GTC):
Description: A GTC order remains active until it's either executed or canceled by you. Fidelity's GTC orders typically have an expiration date (e.g., 180 calendar days), after which they are automatically canceled.
When to use: For limit or stop orders where you're willing to wait for your target price over a longer period. Remember to periodically check your GTC orders and adjust them if market conditions change.
Step 8: Review and Place Your Order
This is your final checkpoint before committing the trade.
Preview Order: Always click the "Preview Order" or "Review Order" button. This will display a summary of your trade, including:
Account selected
Investment symbol and name
Action (Sell)
Quantity/Amount
Order type
Time in force
Estimated proceeds (this is an estimate and may vary for market orders)
Any applicable fees or commissions (though Fidelity offers many commission-free trades)
Verify Everything: Double-check every detail. A mistake here can be costly. Ensure the correct security, quantity, and order type are selected.
Place Order: Once you've confirmed everything is correct, click "Place Order" or "Submit Order."
Step 9: Order Confirmation and What Happens Next
Congratulations, your order has been placed! But the process isn't quite over.
Confirmation: You'll typically receive an immediate confirmation that your order has been received. If it's a market order during market hours, it may execute instantly.
Order Status: You can usually check the status of your order in a "Order Status" or "Trade History" section of your Fidelity account. It will show if the order is "Pending," "Executed," or "Canceled."
Trade Settlement (T+1):
For most stocks, ETFs, and options, trades settle on a T+1 basis. This means the transaction is officially completed one business day after the trade date. So, if you sell on Monday, the funds will settle and be fully available on Tuesday.
Mutual funds can have different settlement periods, sometimes longer than T+1.
Why does this matter? You generally cannot withdraw the funds or use them for new purchases until the trade has settled. While you might see the "cash available to trade" immediately, "cash available to withdraw" will be after settlement.
Accessing Your Funds: Once the trade settles, the cash proceeds will appear in your account's "cash available to withdraw" balance. You can then:
Reinvest: Use the funds to purchase other investments within your Fidelity account.
Transfer to Bank: Initiate an Electronic Funds Transfer (EFT) to link your Fidelity account to your external bank account. This typically takes 1-3 business days after the transfer is initiated.
Wire Transfer: For larger sums or faster access, a wire transfer is an option, though it may involve a fee.
Check: Request a physical check be mailed to you.
Step 10: Understand Tax Implications (Crucial!)
Selling investments in a taxable brokerage account can have significant tax consequences.
Capital Gains and Losses:
Capital Gain: If you sell an investment for more than its purchase price (your cost basis), you realize a capital gain.
Capital Loss: If you sell an investment for less than its purchase price, you realize a capital loss.
Short-Term vs. Long-Term:
Short-Term Capital Gain/Loss: Applies if you held the investment for one year or less. Short-term gains are taxed at your ordinary income tax rate, which can be as high as 37%.
Long-Term Capital Gain/Loss: Applies if you held the investment for more than one year. Long-term gains are generally taxed at more favorable rates (0%, 15%, or 20% for most taxpayers, depending on your income).
Cost Basis Methods: When you sell only a portion of your holdings, Fidelity allows you to choose which "tax lot" (specific shares you purchased at a certain price on a certain date) to sell. Common methods include:
First-In, First-Out (FIFO): Assumes you sell the oldest shares first. This is Fidelity's default.
Last-In, First-Out (LIFO): Assumes you sell the newest shares first.
Highest Cost: Sells shares with the highest cost basis first, which can help minimize capital gains.
Lowest Cost: Sells shares with the lowest cost basis first, which can maximize capital gains (useful for offsetting losses).
You can usually specify your cost basis method before placing the trade.
Wash-Sale Rule: Be very careful about the wash-sale rule. If you sell an investment at a loss and then buy the same or a "substantially identical" security within 30 days before or after the sale date, the IRS will disallow that loss for tax purposes.
Tax-Advantaged Accounts: Investments within accounts like IRAs, 401(k)s, and 529 plans are generally tax-deferred or tax-free. This means capital gains within these accounts are not taxed until you withdraw the funds in retirement (for tax-deferred accounts) or are never taxed (for qualified withdrawals from Roth accounts).
10 Related FAQ Questions (How To's)
Here are some quick answers to frequently asked questions about selling investments on Fidelity:
How to check the settlement status of my sale on Fidelity?
You can typically check the settlement status by navigating to your "Trade History" or "Activity" section within your Fidelity account online. The settlement date for most stocks and ETFs is T+1 (trade date plus one business day).
How to link my bank account to Fidelity for withdrawals?
To link your bank account, log in to Fidelity.com, go to "Accounts & Trade," then "Transfers," and look for "Link a Bank Account." You'll need your bank's routing and account numbers.
How to avoid capital gains tax when selling investments on Fidelity?
The most effective ways to avoid capital gains tax are to hold investments in tax-advantaged accounts (like IRAs, 401(k)s, or HSAs) where gains are tax-deferred or tax-free, or to hold investments for over a year to qualify for lower long-term capital gains rates. You can also use tax-loss harvesting to offset gains with losses.
How to sell only a portion of my shares in a Fidelity account?
When placing a sell order, simply enter the specific number of shares you wish to sell in the "Quantity" field instead of selecting "Sell All."
How to set a stop-loss order on Fidelity?
When placing a sell order, select "Stop Loss" as your order type. You will then be prompted to enter your desired stop price. Remember that a stop-loss order becomes a market order once triggered.
How to view my cost basis on Fidelity before selling?
You can typically view your cost basis information by going to your "Positions" tab within a specific account. Look for details related to "Cost Basis" or "Tax Lots."
How to cancel a pending sell order on Fidelity?
If your order has not yet executed, you can usually cancel it by going to your "Order Status" or "Pending Orders" section within your Fidelity account and selecting the option to cancel the order.
How to sell a mutual fund on Fidelity?
Navigate to "Accounts & Trade" > "Trade" and then select "Trade Mutual Funds." Choose the mutual fund you own from the drop-down list, select "Sell," and enter the quantity or dollar amount.
How to get help from Fidelity customer service if I have trouble selling?
You can contact Fidelity customer service by phone (typically 24/7 at 800-343-3548), through their secure online messaging system, or via their social media channels like Reddit, Facebook, or X (Twitter).
How to understand the difference between cash available to trade and cash available to withdraw on Fidelity?
"Cash available to trade" typically includes the proceeds from recent sales that have not yet settled (T+1), allowing you to reinvest immediately. "Cash available to withdraw" refers to funds that have fully settled and are available to transfer out of your Fidelity account to a bank or other external source.
