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Assignment

When an option seller is required to fulfill the contract because the buyer exercised it.

OptionsIntermediate

Definition

If you sold a call you may have to deliver 100 shares per contract at the strike; if you sold a put you may have to buy 100 shares at the strike. American-style equity options can be assigned any time before expiration, and assignment risk rises when an option is deep in the money or a dividend is near.

Watch out for

Early assignment can change your position unexpectedly. Know the rules your broker applies.

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