Assignment

Assignment occurs when an option buyer exercises their right and the corresponding obligation falls on a short option seller. If you sold a call and it's assigned, you must deliver 100 shares at the strike price. If you sold a put and it's assigned, you must buy 100 shares at the strike price. Assignment can happen at any time for American-style options (most stock options), though it typically occurs at expiration or when an ITM option has minimal extrinsic value remaining.

For strategies like covered calls and cash-secured puts, assignment is a planned outcome, not a disaster. A covered call seller who gets assigned simply sells their shares at the strike price — they keep the premium and the shares were already owned. A cash-secured put seller who gets assigned buys shares at the strike — they've been planning to own the stock and got paid a premium while waiting. The Wheel Strategy explicitly rotates through these assignments as part of its income-generating cycle.

Understanding assignment risk is important for Options Pilot's strategy recommendations. The Timing pillar considers dividend dates (which can trigger early assignment on short calls) and expiration proximity. When the platform suggests strategies like covered calls or cash-secured puts, it factors in whether the user is comfortable with potential assignment at the recommended strike prices.