7. Assignment Anxiety
One thing that causes considerable anxiety for beginning options traders is the prospect of receiving an assignment on an option that they have sold. The goal in this chapter is to relieve some of the anxiety about this aspect of options trading.
In this chapter, it is assumed that you do not have a naked short call or a naked short put position. If you do, you are entirely justified in being anxious because you are vulnerable to substantial risk. Only experienced options traders should venture into naked option selling. This aspect of options trading is discussed later in Chapter 20, “Naked Option Writing,” and Chapter 21, “Stock Substitutes.”
So, it is assumed here that your short option position is covered by either long ...
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