Definition: In options trading, exercise refers to when the option buyer uses their right to buy (call) or sell (put) the underlying stock at the strike price. Assignment refers to the corresponding obligation of the option seller (writer) to fulfill that transaction, forcing them to buy or sell the shares.
Example: With an exercise on a call option, the buyer pays the strike price to buy 100 shares of the stock. The corresponding assignment on the call option means the seller must sell 100 shares at the strike price, even if they don’t own them (i.e. they must first purchase them).
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IVP’s Middle Office Services offer a fully scalable and customizable service that allows all kinds of asset managers to significantly improve operational efficiency and transparency. By outsourcing critical middle office processes, firms can execute option exercises and assignments seamlessly. Our comprehensive suite of middle office services encompasses everything from trade lifecycle management and corporate actions processing to asset lifecycle management.
