What Is the Process of ‘Assignment’ for an Option Writer?

Assignment is the process where the seller (writer) of an option is obligated to fulfill the terms of the contract when the buyer chooses to exercise their right. For a Call Option writer, assignment means they must sell the underlying asset at the strike price.

For a Put Option writer, it means they must buy the underlying asset at the strike price. Assignment is typically random among all writers of the same contract and is a key risk for the option seller.