Assignment and expiration

Assignment is the part of premium selling that happens to you rather than the part you do. It runs overnight, it is allocated at random, and by the time you hear about it there is nothing to decide. Ten articles below, all of them following one covered call through its final week and the penny that decided it.

• Assignment day, hour by hourThe clock from the closing bell on expiration Friday to Monday morning: when the exchanges stop taking exercise notices, when OCC allocates them, when you find out, and when the shares actually leave. One covered call that finished a penny out of the money.
• Early assignment, and when it actually happensHolders exercise about 7 percent of options and most of that lands near expiry, because exercising early throws away the time value left in the contract. The extrinsic-value table that tells you when your short call is genuinely at risk.
• Call assignment against put assignmentOne word, two opposite directions. Assignment on a short call takes 100 shares out and puts cash in. Assignment on a short put takes cash out and puts 100 shares in. Both worked with real numbers, plus what each does to your buying power.
• Pin risk at expirationA short call that finishes a penny out of the money is not a win, it is an unresolved coin flip you carry until Saturday. One covered call, a $72.49 close against a $72.50 strike, and both Monday mornings priced out.
• Automatic exercise, and the $0.01 thresholdOCC exercises expiring equity options that finish a penny or more in the money unless somebody instructs otherwise. What exercise by exception means for the contract you are short, when the instruction window shuts, and the case where the automatic behaviour is the one you do not want.
• Closing against letting it expireLetting a short option expire is free and closing it costs whatever the contract still trades for. The comparison that decides it, worked on one covered call in its final four days, including the case where paying for safety was the worst outcome of the three.
• The 50 percent profit rule, testedBuy back a short option once half the credit is gone. Run against one covered call across four price paths, the rule collected less than holding on every path that ended worthless, and on the path that lost $397 it never fired at all. What it is actually good for.
• Assignment on ex-dividend dayA call holder exercises the day before a stock goes ex-dividend when the dividend beats the time value they give up. The comparison in one table, which strikes it reaches, the put-side version nobody mentions, and the tax rule that can cost more than the premium.
• Mergers, splits and adjusted contractsOCC rewrites the terms of contracts that are already open when the underlying does something structural. Splits, reverse splits, cash mergers, spinoffs, special dividends and bankruptcy, with what each does to the strike, the contract count and what one contract actually delivers.
• Expiration Friday, in orderWhat to do on expiration Friday, in order, from Thursday night through Monday morning. Which positions need a decision, when the window for making it shuts, and the three that need deciding before 3pm rather than at the bell.

Read them in this order

If you have never been assigned: the timeline from the closing bell to Monday, then which way the shares move, then how rare early assignment actually is. That is the whole subject.

The pages that change decisions: the penny that was worth $140, the profit rule tested on four paths, and the one assignment you can see coming days ahead.

One position, ten articles

Everything here follows a single illustrative trade into expiry: short one October 17 $72.50 call against 100 shares of UBER, the same position the Greeks series took apart at the open. It closes expiration Friday at $72.49, one cent out of the money, and opens Monday at $71.10. Assigned, that is $7,403. Not assigned, $7,263. Every price and every time value on these pages was computed rather than asserted.

What this series will not tell you

That assignment is a disaster. On a covered call it is the trade working: maximum profit, position closed, sometimes earlier than planned. The outcome worth fearing is not assignment, it is the stock running past your strike while you still hold the contract, and no assignment rule addresses that.

It also will not tell you the 50 percent profit rule protects you. It fires only when the option is getting cheaper, which is only when you are winning. The page tests it on four paths and publishes the result that does not flatter it.

And it will not explain how the OptionsKing confidence score is computed. Assignment mechanics are OCC rules and belong in public. What the engine does with them stays private: the score feeds a ranking and the app shows you the highest-ranked handful of what it found, and how it works covers what that guarantees.

Questions people actually ask

Run your own numbers

• Assignment probability calculator delta to keep-odds, and the caveat that matters.
• Roll analyzer whether rolling beats taking the assignment.
• Covered call calculator the position every page here follows.
• Break-even calculator the price where the decision changes.