Assign is the act where the brokerage houses and clearance houses select future contract holders as well as short options in order to deliver underlying commodities or securities for the exercised or maturing option contracts.
There are certain contracts that need settlement with delivery of the underlying asset. Such option contracts would not be exercised. Very often, the allocation of contracts by the clearing houses is done to the brokerage firms randomly. In turn, there is also random selection of clients for assignment too.
Tags: Assign, brokerage houses, clearance houses
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