Most options backtests assume European-style behaviour: nothing happens until expiry. On American-style single-name options that assumption is wrong some of the time, and it is wrong in the direction that flatters the result. A study that never models early assignment should say so.
Assignment isn’t a loss. It is a position you now own, at a price you agreed to weeks ago.
It happens, though rarely, and it is almost never in the exerciser’s interest. Treat it as noise rather than as a risk to plan around.
No. The long leg is still there and still worth something. What assignment costs is the certainty and the buying power, not usually the money.
Close the short leg before it goes deep in the money, or use a time exit that takes you out before expiry week. Both are exits from this list.
On a short call that is in the money, yes. It is the one case where the timing is predictable enough to plan around.
No assignment result is published yet.
It matters most for the wheel, where assignment is the strategy rather than an accident. That test is queued, and when it publishes this entry will link to what the assignment rate actually was under the specification we ran.
