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Define: Options Assignment

Assignment happens when in the money options that you wrote are exercised by the investors who bought those options. When call options that you wrote are assigned, your stocks will be sold at the strike price of the call options. When put options that you wrote are assigned, you will buy the stocks at the strike price of the put options.

Assignment can happen anytime prior to expiration or on expiration day itself as long as you hold short in the money options positions. In reality, assignment is a random process where the clearinghouse and your broker randomly select holders of short options positions for assignment whenever long options positions are being exercised.

Read the full tutorial on Options Assignment.