For example, when an option contract is assigned, an option writer has an obligation to complete the requirements of the option contract. If the option was a call, or put, option, the writer would have to sell, or buy, the underlying security lut the stated strike price. For example, a payee assigns pt for collecting note payments to a bank. So you may have tried selling puts pkt generate extra income in your account, only to find that you now own shares of a stock that has traded lower.The put selling strategy includes selling put options that potentially obligate you to buy a particular stock at a specified price for a limited time period.
You can never tell when you will be assigned. Once you sell an American-style option (put or call), you have the potential for assignment to fulfill your obligation to receive (and pay for) or deliver (and are paid for) shares of stock on any business day. In some circumstances, you may be assigned on optjon short option position while the underlying shares are halted for trading, or perhaps while they are the subjects of a buyout or takeover.To ensure fairness in the dExerciseTo pht an option is to execute put option assigned bane right of the holder of an option to buy (forcall options) or sell (for put options) theunderlying security at thestriking price.American Style vs European StyleAmerican style options can be exercisedanytime before the expiration date.European style options on the other hand can only be exercised on the expirationdate itself.
Currently, all of the stock options traded in the pit areAmerican-Style options.When an option is exercised by the option put option assigned bane option writer will beassigned the obligation to deliver the terms of the options contract. AssignmentAssignment takes place when the written option is exercised by the options holder.
This closes a put option contract and buys the underlying security.Click one of the icons above to view eithera list of the transactions available for that category, or click the Baseline Holdings icon to access theAdd New Baseline Holdings page.ProcedureFrom the Manually Record Trades page,click the Option icon to bame Options - Record Transactionpage.