Options sound complicated. They're not — once someone explains them without the jargon.
You check your brokerage account Monday morning and something looks different. The MSFT position that showed 100 shares on Friday is gone. In its place: a cash credit. No error message, no warning — just a settled transaction that happened over the weekend.
The BasicsThe word "assignment" carries a vaguely threatening connotation for anyone new to covered calls. Something is being assigned to you — taken from you — against your will. When traders first see their shares disappear from a brokerage account with a note that the call was "assigned," the instinct i...
New covered call sellers worry about a lot of things. They worry about assignment in general, about earnings surprises, about stocks rallying past their strike. But one fear shows up more consistently than most: what if the option buyer exercises early — before expiration — and forces an unexpect...