Start with assignment
A short put can obligate the seller to buy shares at the strike if assigned. Premium reduces the expiration breakeven but does not remove substantial downside if the underlying falls.
Calculate the cash or margin required, maximum modeled loss for the contract, and portfolio concentration after assignment. Do not describe premium as yield without naming the capital and risk denominator.
- Strike and multiplier
- Premium received
- Assignment cost
- Collateral rule
- Resulting concentration
Include early and operational risk
American-style options may be assigned before expiration. Ex-dividend dates, deep intrinsic value, account restrictions, and broker risk controls can affect timing.
Closing a position requires a market and may cost more than the remaining modeled value when spreads widen.
Assume assignment occurs today and verify cash, resulting position size, downside, and the action the account would permit.