DITM short put assignment risk?

Discussion in 'Options' started by turkeyneck, Aug 8, 2011.

  1. What do you guys think about this? Is the assignment risk really insignificant on the DITM short put with no time premium left if the underlying is a non-dividend paying stock?

    "Traders have many risks associated with a position. It is important to concentrate on the most important risks, while ignoring the insignificant risks. In almost every case, save dividends, assignment risk is at or near the bottom of trader’s risks."

  2. rickf


    A good rule of thumb I was told early on:

    If your short put is in the money, you will get put the stock at expiration, dividend or no dividend. ;)
  3. Actually I meant to say EARLY assignment BEFORE expiration if the put is DITM with no time premium left.
  4. rickf


    Oh. Since I'm not one to play the odds, so if an option is in the money, I presume it can be called/assigned at any time before expiration.
  5. tomk96


    if the stock is hard to borrow, or generally expensive to borrow, you will get assigned.
  6. Assume assignment.
  7. Assume assignment especially when the delta is close to 1.00.