What is an assignment in options trading?

An assignment represents the seller of an option’s obligation to fulfill the terms of the contract by either selling or purchasing the underlying security at the exercise price. Let’s explain what that means in more detail. In the world of options, assignment happens when the holder of an option exercises their right under the contract.

What is an assignment fee?

An assignment fee is a payment from the “ assignor ” (wholesaler) to the “ assignee ” (cash buyer) when the assignee transfers their rights or interest of a property to the assignor during the close of a real estate transaction. Most often, this term is used in the real estate investing strategy of “wholesaling”.

What percentage of options get assigned?

Less than 7% of options get assigned and they tend to get assigned as the option’s expiration date gets closer. Having an option assigned does mean that you are forced to lock in a loss on an option, which can hurt.

Will my assignment fee be inside the closing statements?

In a typical assignment transfer, yes your assignment fee will be inside the closing statements. After a property closes escrow, every party involved will get “closing statements” that look might look like this (depending on your state and the companies you use):