65-Day Academy · Day 51 · Options: Foundations
Assignment — the Obligation Side
Who gets assigned
Option BUYERS exercise (or not) at will; SELLERS are assigned at random by the OCC when buyers exercise. Short puts assigned = you buy 100 shares at strike (planned, if cash-secured). Short calls assigned = you deliver 100 shares (covered) or buy them at market (naked — unlimited risk). Assignment typically happens at expiration, but EARLY assignment happens — most commonly on deep-ITM shorts right before ex-dividend (the buyer captures the dividend).
The operational checklist
Before selling any option, know: what assignment physically does to the account (shares appear/disappear, cash moves), whether the position is covered/secured, the margin requirement, and the early-assignment triggers (dividends, deep ITM). The Wheel strategy (day 55) is built ENTIRELY on welcoming assignment — which is only safe because it is planned and cash-secured.
What you'll practise
You sold one cash-secured $95 put; stock is $80 at expiration. What happens? (Select all that apply)
15 XP in the app · intermediate
Sources
- Options Assignment & ExerciseCBOE education
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All lessons are for educational purposes only and are not individualized financial advice, a recommendation, or a solicitation to buy or sell any security. Options involve substantial risk and are not suitable for every investor.