Q: Can i be assigned if I buy-to-close a short position?
A: A completed buy-to-close normally removes the short position from that day’s assignment exposure because closing purchases are processed before the exercise allocation. Placing an order is not enough; it must execute. An assignment from the previous processing cycle may already have occurred without yet appearing in your account. Closing part of a position leaves the remaining contracts exposed. Confirm fills, positions and assignment notices with your broker.
More Frequently Asked Questions
- What are the differences between standardized options and employee stock options?
- I recently bought a call option. Since then, the stock price has risen and so has the call option. I wish to sell my call option for a profit but am I obligated to deliver the underlying stock if the option buyer decides to exercise his call option?
- Does an increase in open interest imply a bullish sentiment?
- I own options on a stock that has just declared a 2 for 1 stock split. What happens to my options?
- What's the difference between options and futures?
- Why do some stocks have options for trading while others don't?
