Channel3000.com
December 17, 2020 8:06 AM newsfeedback@fool.com (FINRA Staff)
Posted:
Updated:
December 19, 2020 6:06 AM
The options market can seem to have a language of its own. To the average investor, there are likely a number of unfamiliar terms, but for an individual with a short options position someone who has sold call or put options there is perhaps no term more important than “assignment“ the fulfilling of the requirements of an options contract.
When someone buys options to open a new position (“Buy to Open”), they are buying a
right either the right to buy the underlying security at a specified price (the strike price) in the case of a call option, or the right to sell the underlying security in the case of a put option.