Is Early Assignment a Factor in Cash-Settled Crypto Options?
No, early assignment is generally not a factor for cash-settled crypto options, especially if they are European-style. Cash-settled options do not involve the physical delivery of the underlying asset; instead, the difference between the strike price and the final price is settled in cash at expiration.
This structure inherently removes the possibility and need for early assignment.
Glossar
Assignment
Obligation ⎊ Assignment in options trading refers to the mandatory fulfillment of the contract terms imposed upon the option seller, or writer, when the buyer chooses to exercise their right.
Crypto Options Exchanges
Volatility ⎊ Crypto options exchanges facilitate the transfer of volatility risk associated with underlying cryptocurrency assets, functioning as centralized or decentralized marketplaces where participants can buy and sell call and put options.
Early Assignment
Assignment ⎊ In the realm of cryptocurrency derivatives and options trading, early assignment denotes the preemptive exercise of an option contract prior to its standard expiration date.