SIE practice questionmediumExercise/Assignment
When an option is exercised, who determines the specific shares to be delivered?
- AThe seller’s broker-dealer
- BThe options clearing organization✓ Correct answer
- CThe buyer of the option
- DThe exchange itself
Explanation
Why B — The options clearing organization
The options clearing organization assigns exercise notices to a member firm. The firm may then decide which client covers the exercise, but assignment originates with the clearing org.
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