TIL If You Buy Puts and Hold Shares in the Same Security, Fidelity Will Link Those Shares to Those Contracts.

I had a learning moment today I'd like to share.

I hold 400 shares of $BB and have been selling weekly covered calls to lower my cost basis. For the past few months, it has been working towards my personal targets.

Last week, $BB had a dramatic rise on some good news plus meme wave sentiment, so I expected it to correct down in price on Monday (today) at open. At the time, I had 4 covered calls against these shares, so to capitalize on my thesis, I bought an additional 2 ITM puts. Come Friday last week, the covered calls were expiring just ITM, and I wanted to keep the shares, so I closed out the CC's for a small loss, but kept the 2 puts.

Come market open on Monday, I tried to open a new set of 4 covered calls. However, received a cryptic error notice. After some frantic attempts via other interfaces (Trader Pro, Web Portal, App) I was not successful. After checking the likely suspects such as other pending orders, unsettled transactions, I couldn't find a reason. $BB price had corrected as expected and I had lost a lot of potential premium because of this.

After calling Fidelity, I learned that the 2 puts I bought had been "linked" to my shares. I thought this was strange as there is no need to cover a purchased put with held shares. Max loss is the price paid for the put. I also have enough cash/margin to execute the contracts if I wanted to, without touching my 400 shares. Anyways, this linking of long puts to shares took away my ability to write covered calls on said shares.

TL,DR: Had 400 shares, sold 4 covered calls, bought 2 puts. Exited covered calls, but could not re-enter into 4 new covered calls as 200 of my shares were then linked to long puts. Sold 2 covered calls instead.