Your short option
Take these from your broker's option chain. Everything updates as you type.
How this is worked out
- Chance of finishing in the money uses the standard lognormal model: the same maths behind option pricing, driven by the implied volatility you enter.
- One standard deviation = stock price × IV × √(days ÷ 365). About 68% of outcomes land inside that range.
- Time value = what the option costs now, minus how far it is in the money. Early assignment becomes plausible once that reaches roughly zero.
- American options can be assigned any day, not only at expiration. In practice it happens when the remaining time value is smaller than what the holder gains by exercising early.
- For covered calls, an upcoming dividend larger than the remaining time value is the classic early-assignment trigger, usually the day before the ex-dividend date.
- No interest rate is applied, and the model assumes no dividends for puts. Real chances differ; treat this as a guide, not a guarantee.
When assignment actually happens
Most option sellers worry about the wrong thing. Being in the money doesn't mean you'll be assigned tomorrow; it means you'll probably be assigned at expiration. Early assignment is rarer and has specific triggers.
The three that matter
- Time value near zero. Whoever holds your option gives up its remaining time value by exercising early. While that value is meaningful, they'd rather sell the option than exercise it.
- A dividend larger than the remaining time value, for calls. Holders exercise the day before the ex-dividend date to capture the dividend. If you're short a call on a dividend payer, this is the moment to watch.
- Deep in the money near expiration. As expiry approaches, time value drains away, and exercise becomes the rational choice.
If you're assigned on a put
You buy 100 shares per contract at the strike, and the premium you kept lowers your effective cost. For a wheel trader that isn't a failure; it's the point, provided you chose a stock you wanted to own and a strike you were happy to pay. From there you can sell covered calls against the shares.
What this checker doesn't know
Your broker's margin rules, pin risk at expiration, dividends on puts, interest rates, or whether the option holder is behaving rationally. It also uses the implied volatility you typed, which changes constantly. Use it to size up risk, not to decide with certainty.