Scalping on Fidelity
Is it possible to use Fidelity for scalping? What tools does Fidelity provide for scalp traders? In this article, we answer these questions and more.
Does Fidelity Allow Scalping?
Yes, Fidelity does offer an ability to scalp stocks and other products. In fact, it has powerful
tools that scalpers can use to make quick profit.
Active Trader Pro
Fidelity’s downloadable desktop trading platform Active Trader Pro is the most effective tool that traders can use for scalping. All Fidelity clients get access to the platform for free and can download it right from Fidelity’s website. The platform automatically comes with free access to real-time streaming quotes and level 2 quotes.
Scalping Tools
Fidelity provides several helpful tools that make scalping possible and that can give scalp traders that tiny edge necessary for successful scalping. Most of these tools are found within its Active Trader Pro platform but some can be found on its website and/or mobile app as well.
Fidelity has a customizable level 2 quotes window called Directed Trade. The Directed Trade tool contains your account’s buying power at the top, order entry fields below that, and both level 2 quotes and time & sales side by side at the bottom. You can customize the color scheme of the level 2 quotes as well as the depth of the level 2 quotes and time and sales windows. This tool alone may provide some scalp traders with everything that they need.
Fidelity has good, but not amazing, charts and charting features specifically within its Active Trader Pro platform. Fidelity’s charts have customizable settings, over 10 different timeframes, over 100 different technical indicators, and over 20 different drawing tools. The downsides of Fidelity’s charts are that you can’t click and drag the chart to adjust the timeframe view or the price level view, you can’t change the cursor to a free-moving crosshair, and it’s not as easy to edit the indicators being used as it is with other brokers charts.
Fidelity offers many different ways for scalp traders to place both equity and option orders within its Active Trader Pro. Depending on your preferences, you may find some of the ways either more or less efficient for your style of scalp trading. Some of the main order entry methods are using one of the multiple classic order entry windows, right-clicking on a chart, clicking on a bid or ask in the level 2 quotes, or using a bracket-style order in Fidelity’s Trade Armor tool.
Fidelity Order Execution & Price Improvement
In Q4 of 2021, Fidelity’s order execution stats included 98.5% of shares being executed at or within the National Best Bid and Offer, an average effective spread of only $0.0137, and an average execution speed of just 0.05 seconds. In that same quarter, Fidelity reports having provided price improvement on 87.36% of executed shares. In the full year of 2021, Fidelity claims to have saved traders an average of $19.24 per every 1,000 shares on equity orders.
Fidelity claims to be the only broker that voluntarily reports its full price improvement information using the Financial Information Forum (FIF) standards. They also claim to not take any payment for order flow from market makers for stock and ETF trades. They make price improvement details on your orders available to view on your trade history on the website as well as on your order confirmations. Fidelity posts its firmwide price improvement reports openly on its website for any traders to view.
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Fidelity Order Routing
Fidelity provides some flexibility for scalp traders regarding order routing, but not as many order routing options as you can find with direct-access brokers. The main order routing directions that Fidelity offers are automatic routing, NYSE Arca, Fidelity Dynamic Liquidity Management (FDLM), Investors Exchange, NASDAQ, and NYSE. Scalp traders may be able to take advantage of Fidelity’s auto-routing and/or FDLM routing which both scan many different market centers to always try and find the best prices.
Fidelity Scalping Conclusion
You may not find using a large discount broker like Fidelity to be the most effective broker for scalping, but it’s certainly possible for scalp traders to find success using them. The combination of Fidelity’s order execution quality, Active Trader Pro platform, and scalping tools might just be the perfect combination for some scalp traders.
Updated on 2/9/2025.
Paul Johnson is a Licensed Stockbroker with 7+ years of experience in the financial services industry. Paul enjoys teaching about investing and writing about financial topics. He is a husband and father of twin boys.
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