Why Assignments are Rare

Yesterday, we went through our BABA assignment, and we showed <a href="https://ontt.tv/Nr0pd" target="_blank">how to unwind an assigned position</a>. Today, we wanted to continue that discussion by remembering that even though we did take assignment just yesterday, assignments in general are still a rare occurrence. The reason being is that there will always be <a href="https://ontt.tv/HrMXg" target="_blank">some extrinsic value left</a> in the option prior to expiration, so it is always more economically advantageous for the long side of the contract to sell the option rather than exercise it.