What Is “Being Assigned” on a Short Call Option?
Being assigned means the seller of the short call option is obligated to sell the underlying asset at the strike price to the option buyer. In a covered call, the seller already owns the asset, so they deliver it.
This usually happens when the option is in-the-money and near or at expiration, or if it is an American-style option that is exercised early. Assignment fulfills the contract obligation.
Glossar
Underlying Asset
Futures Pricing incorporates the cost of carry, which in crypto markets includes funding rates derived from perpetual swap markets and the time value associated with holding the spot asset.
Short Call Option
Premium ⎊ A short call option represents an obligation assumed by the seller to potentially deliver an underlying cryptocurrency asset at a predetermined strike price, receiving a premium as immediate compensation for this commitment.
Strike Price
Reference ⎊ The Strike Price is the predetermined reference level set at the contract's inception against which the underlying crypto asset's spot price is compared at expiration or exercise.
Options Clearing Corporation
Entity ⎊ The Options Clearing Corporation (OCC) functions as the primary clearing entity for equity options, foreign currency options, and various other derivative products in the United States.