Assignment

Assignment is what happens to an options seller when a buyer holding that same option series exercises their right. It isn't a direct handoff between two specific traders — the Options Clearing Corporation randomly selects a broker with a matching short position (who then selects a client of theirs), so as the seller you can still be the one picked even though you never dealt with a specific buyer. If you sold a put and the stock finishes below the strike, assignment means you're required to buy 100 shares per contract at that strike; if you sold a call and the stock finishes above the strike, assignment means you're required to sell 100 shares per contract at that strike. Assignment isn't limited to expiration day — most equity options are American-style, meaning they can be exercised (and therefore assigned) at any point before expiration. Early assignment is most common around dividends: it's most likely for deep in-the-money short calls right before the stock's ex-dividend date (the buyer exercises to capture the dividend), and slightly more likely for deep in-the-money short puts just after it. Assignment is a normal, planned-for outcome of selling an option, not a sign anything went wrong; experienced sellers only sell puts on stock they'd be glad to own, and only sell calls on shares they're genuinely willing to part with, specifically so assignment is an acceptable result either way.