Why Would a Short Option be Assigned Early?

A short option can be assigned at any time because the long option holder has the right to exercise whenever they want. However, there are three primary situations where it is much more likely that you could be assigned early.


A long call holder might exercise their call before the ex-dividend date so that they can collect the dividend. For a detailed explanation of dividend risk, please click here.

Hard-to-borrow (HTB) fees 

Certain stocks have hard-to-borrow (HTB) fees. This means that anyone who needs to borrow shares to sell the stock short needs to pay an additional fee. Conversely, anyone who is long the stock could potentially lend their shares out and receive money for doing so. As a result, if you are short calls in a hard-to-borrow stock, then there is a higher possibility of being assigned early because it may be more beneficial for the long call holder to exercise and lend out the shares. In this case, you will be short the stock, and you will have to pay the hard-to-borrow fees. To learn more about hard-to-borrow fees, please click here.


Any deep-in-the-money put is at risk of early assignment. This is because it may be better for a long put holder to exercise their put and sell the stock so they can collect interest on the proceeds from the short sale. If you need to borrow money for the stock purchased from an assignment, you will have to pay interest on those funds.