What is the probabiltiy of being assigned if the call expires in the money
If I sell a call option and at expiry, the call is in the money, is it guaranteed that I will be assigned and will need to deliver the underlying? What is the probability of assignment/
My question is that let us say i dont get assigned (since assignment is random) even though the call expires ITM. Then i still get to keep the call premium, correct?
Kinda seems like having your cake and eat it too, where am I going wrong?
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If you are in the money at expiration you are going to get assigned to the person on the other side of the contract. This is an extremely high probability.
The only randomness comes from before expiration. Where you may be assigned because a holder exercised the option before expiration, this can unbalance some of your strategies. But in exchange, you get all the premium that was still left on the option when they exercised.
An in the money option, at expiration, has no premium. The value of your in the money option is Current Stock price - Strike Price, for a call. And Strike price - Current Stock price, for a put.
Thats why there is no free lunch in this scenario.
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