Assignment

When an option seller is required to fulfil the contract — deliver or buy the shares — because the buyer exercised.

Assignment is what happens to an option seller when the buyer decides to exercise. If you sold a call, you get assigned and must deliver 100 shares per contract at the strike; if you sold a put, you get assigned and must buy 100 shares at the strike. It is the flip side of exercise: the buyer chooses, and as the seller you have no say once it happens.

In practice, most traders meet assignment through short options that drift in the money. A cash-secured put is the classic case: you sell a put on a stock you would happily own, collect the premium, and if the stock falls below the strike you may be assigned and end up buying the shares at that price. That is often the plan, not an accident.

The common mistake is forgetting that American-style options can be assigned early, especially short calls the day before an ex-dividend date, or deep in the money legs of a spread. If only one leg gets assigned, you can suddenly hold a large stock position overnight. Watch in the money short options as expiration nears and close or roll them before assignment forces your hand.

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All options terms

Call Put Strike price Premium Expiration In the money (ITM)At the money (ATM)Out of the money (OTM)Intrinsic value Time value (extrinsic)Delta Gamma Theta Vega Implied volatility (IV)Open interest Exercise Spread Break-even Probability of profit (POP)Assignment risk / early assignment LEAPS Naked (uncovered) option Rho Historical volatility (HV)Volume Bid-ask spread Moneyness Covered call Cash-secured put Vertical spread Iron condor Straddle Strangle Rolling Margin Max pain American-style option European-style option Contract multiplier Debit vs credit Volatility skew The Greeks Underlying Hedge Leverage Expected move Notional value Protective put Collar Butterfly spread Iron butterfly Calendar spread Diagonal spread Credit spread Debit spread Bull call spread Bear put spread Ratio spread Synthetic position The wheel strategy Poor man’s covered call (PMCC)Box spread Put-call parity Pin risk IV crush IV rank / IV percentile Ex-dividend date Deep in the money Weeklys 0DTE (zero days to expiration)Order types (to open / to close)Buying power reduction Cash settlement Market maker Slippage Mid price Black-Scholes model

Educational use only. Quotes are delayed ~15 minutes and nothing here is financial advice. Options trading involves substantial risk of loss.