How are accounts selected for option assignments?

[Arnie Guitar]

I was short an FCX April 14 45 Covered Call had the stock called away.

It got me thinking.

Why were my shares selected as opposed to someone else who had a Covered Call written against some ITM FCX at the same April 45 Call?

How do they pick who’s shares get taken?

 

[FSU]

The OCC gives assignments to member firms randomly. Your broker will give them to its customers in a pre determined method, usually randomly as well, but they may use another method such as FIFO.

 

[TheDawn]

I was short an FCX April 14 45 Covered Call had the stock called away.

It got me thinking.

Why were my shares selected as opposed to someone else who had a Covered Call written against some ITM FCX at the same April 45 Call?

How do they pick who’s shares get taken?

It's random.

 

[ET180]

I wish there was a way for short option holders to indicate their preference on being assigned or not. There are times when I am short an option and want to get assigned. The OCC could simply assign all options to all or some of the short option holders who want assignment and then randomly assign whatever is left over to everyone else.

 

[bookish]

I wish there was a way for short option holders to indicate their preference on being assigned or not. There are times when I am short an option and want to get assigned. The OCC could simply assign all options to all or some of the short option holders who want assignment and then randomly assign whatever is left over to everyone else.

I had a broker that let you indicate this in the advanced settings. I forget which one. It was one of the more popular brokers.

I dont recall if it was a per trade or account level setting.

If you find it let us know.

 

[ET180]

I had a broker that let you indicate this in the advanced settings. I forget which one. It was one of the more popular brokers.

I dont recall if it was a per trade or account level setting.

If you find it let us know.

It should be done industry wide. Doesn't seem like it would require that much work to implement since (I assume) every broker already has a way for their clients to early exercise or force lapse of long options.