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Can put options be assigned when the stock is above the strike price?
Hi all,
I guess I've already learned the answer to this question by trial and error, but I wanted to ask simply to confirm the fact, because I'm new to options and now confused.
I sold a put option on a stock 3 weeks before expiration. The price never fell to or below the strike price, yet I was assigned last Saturday. From my reading, I was under the impression that the option could only be exercised if the price fell to or below the strike. Is that not correct? Can the holder exercise the contract (and take a loss I suppose) even when the price is above the strike price.
Don't get me wrong. I was happy to buy the stock at such a discount. I just didn't expect to be assigned when the holder could have sold easily on the market for %0.50 more per share.
Thanks!
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