Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
Investment and Options Strategist
This article is the final entry in our four-part series on option assignment. It condenses key lessons from the previous articles into one practical reference. Whether you're an investor using covered calls and puts or a trader managing spreads and multi-leg strategies, this article helps you recognize risk, avoid surprises, and make assignment work for you.
This is part 4: Option assignment cheat sheet.
Assignment occurs when the buyer of an option exercises it. If you’ve sold that option, you may be required to deliver (calls) or buy (puts) 100 shares per contract. Assignment can happen any time an option is in the money, but it’s most common when there is little or no time value (extrinsic value) remaining.
Assignment does not happen during the trading session. It’s processed after the market closes and is reflected in your account the next morning. This is explained in detail in Part 1.
Assignment risk rises when:
There is no assignment risk if the option is out of the money. Exercising in that case would lose the buyer money.
To estimate extrinsic value:
These are often signs that assignment may happen that evening. Consider closing or rolling the position before the close.
When you are assigned, these follow-up strategies apply:
If the answer is no to any of the above, assignment risk is low.
For deeper context, explore:
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