The Assignment Fear That’s Costing You Money and How to Fix It

by Chris Pulver | Jun 23, 2026

Let me address something that causes more panic in traders’ minds than it should…

Getting assigned shares on a credit spread.

I’ve taught this countless times and it’s always the same reaction. People see an assignment notice and immediately think something catastrophic has happened.

The truth is, the mechanics might change but the risk does not. If you get assigned at $170, your $160 long put is still live and in profit. At the end of the day, this is still a risk-defined $10-wide spread.

The first rule is don’t panic. You have a hedge and the other side of your trade is working exactly the way it’s supposed to.

Fear around assignment is common because traders imagine the worst-case scenario, but the structure of the trade already protects you. Once you understand that, the entire situation becomes far more manageable.

Understanding What Actually Happens During Assignment

There’s still less than about a 7% chance of getting assigned on a risk-defined credit spread, so it’s not something you’re dealing with every day. But if it happens, the process is simple.

If you’re assigned on your short put, maybe at $170 while the stock drops to $100, it looks ugly at first glance. Yet your long $160 put is now deeply in the money (ITM) and can be closed for substantial value.

Close the long put, close the shares, and you’re looking at roughly the same $5 risk you agreed to at the start. Sometimes the timing can even work in your favor, reducing that loss.

The assignment doesn’t put you in trouble and the broker isn’t coming after your account. You still get the same defined-risk trade you opened — no surprises, no hidden losses.

The Professional Repair Strategy

Instead of shutting everything down and walking away with a full loss, there’s a smarter path. When you’re assigned shares, you now own stock at the short strike, but you can immediately begin repairing the position.

I typically do this only with something I want to own so I can stay in the trade with confidence.

The approach is straightforward. Close the long put, calculate your effective cost basis, then start selling covered calls against the shares. Each call you sell lowers your cost basis or gives the market a chance to take the shares off your hands at break-even or better so long as you sell the strike at or above where you were assigned.

If your adjusted basis is around $105, selling calls at or above $105 can make meaningful progress fast.

This technique turns a moment of panic into a great opportunity.

You’re not stuck. You’re in control.

Assignment isn’t failure — it’s simply a transition into a different strategy that uses the same capital more efficiently and gives you multiple chances to work the trade back to neutral or even very much into profitable territory.

I’ll see you in the markets.

Chris Pulver
Chris Pulver Trading

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