November 5, 2019

What To Do When You Get Assigned On An Option

A short option, regardless of whether it’s a call or put, can be assigned at any time regardless if the option is in or out of the money.  When selling a put, the seller is contractually giving the right for the put owner to sell or “put” them stock at a given price (Strike Price) in a given set of time (expiration). Selling a call gives the right to the call owner to buy or “call” stock away from the seller within a given time frame. The purchaser of an option has the right to exercise at any time prior to expiration, but not necessarily the obligation to do so. Short options are most commonly assigned if the options expire in the money.

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about the author:

Scott Bauer

A respected market commentator seen on Bloomberg, Fox Business, CNBC and other major financial networks, Scott Bauer has 25 plus years of professional equity and index options experience at the Chicago Board Options Exchange (CBOE) and Chicago Mercantile Exchange (CME) and as a Vice-President/trader for Goldman Sachs. Scott graduated with Honors from the University of Illinois Business School and has taught classes both at his alma mater and at the CBOE.

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