Practical guide
What if one leg of a spread is assigned?
A multi-leg position can become unbalanced if one short leg is assigned. Review the contract, account capacity, and broker procedures before acting.
Start with the contract
Write down the underlying, option type, strike, expiration, style, and multiplier. Describe the obligation in shares or gross strike value before premium, fees, taxes, or price movement.
Concrete example
One 100-share contract at a $50 strike has a simple $5,000 gross strike-value example. This is not a forecast, margin requirement, or recommendation.
Questions for your broker
- How are notices allocated?
- What notifications and cutoffs apply?
- How are spreads and settlement reflected?
Primary reading: OIC exercise and assignment overview · SEC Investor Bulletin · FINRA assignment guide