What Is the Concept of “Assignment” for an Options Seller?

Assignment is the obligation placed upon the seller (writer) of an option to fulfill the terms of the contract when the option is exercised by the buyer. For a call option seller, assignment means they must sell the underlying asset at the strike price.

For a put option seller, it means they must buy the underlying asset at the strike price. Assignment is typically triggered when the option is deep in-the-money and near or at expiration.