Assignment

Summary

Assignment is the process by which a writer is selected and notified to fulfil the option obligation after exercise. In centrally cleared markets, it is handled through clearing member accounts and then allocated to customer accounts.

Definition

Assignment is how the obligation on the short side of an option becomes attached to a particular writer after a holder exercises. In centrally cleared markets, the clearing system allocates assignment through clearing member accounts, and firms then allocate it onwards to customer accounts. The article highlights two practical consequences: assignment can happen whenever an option is exercisable, which is especially important for American style options, and notification can lag, meaning the writer may learn of assignment after the initial clearing allocation has already happened. Once assigned, the writer can no longer rely on simply closing the option and must settle according to the contract terms.

Sources

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Last updated 19 August 2026

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