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SIE: Options
SIE practice questionmediumExercise/Assignment

When is a call seller 'assigned'?

  1. AAt option expiration regardless of exercise
  2. BAt the time of writing the option
  3. CWhen the call buyer exercises the contract✓ Correct answer
  4. DOnly if the option is out of the money
Explanation

Why CWhen the call buyer exercises the contract

Assignment occurs only if the buyer exercises. Expiration with no exercise requires no action; options out of the money are unlikely to be exercised.

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