SIE practice questionmediumExercise/assignment
When an option writer is assigned, they must:
- ABuy the underlying at market price
- BFulfill the terms of the contract✓ Correct answer
- CReceive the premium again
- DAutomatically close the position
Explanation
Why B — Fulfill the terms of the contract
Assignment obligates the writer to deliver (calls) or buy (puts) as per contract. The other choices confuse assignment with unrelated concepts.
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