While your options contract is open, a few things can happen to your position. Here is what to expect.

Collateral

When you sell an option, what backs the contract, the 100 shares or the cash, gets locked. It is still yours, but you cannot sell it, withdraw it, or use it for other orders while the contract is open. The lock starts as soon as your order is pending, not when it fills.

Your collateral is released when the contract ends: when you buy it back to close, when it expires worthless, or when it is used in an assignment.

Assignment

Assignment is the mirror of exercise. When the buyer of an option uses their right, whoever sold the contract has to deliver. Assignment only applies if you sold a contract. Buying options never gets you assigned.

Assignment is distributed among the contract's sellers, so you cannot choose when it happens or avoid it once it has occurred. You find out afterward. The only way to avoid assignment is to close your position first. If you are assigned, you deliver exactly what was locked: the shares for a covered call, or the cash for a cash-secured put. You get a notification and your position updates.

Closing a position early

You can close a position before expiration, and it is the most common move. If you bought a contract, you sell it to close. If you sold one, you buy it back to close. Either way, you exit the position with no new obligation.

Corporate actions

If the stock behind your contract has a split, a merger, or a name change, that counts as a corporate action. Bitso adjusts the strike and the number of contracts automatically so the value of your position stays the same. You do not need to do anything. You will see the adjustment reflected in your position and your activity.