Definition: An assignment is a process of transferring ownership or control of a thing from one person to another. It involves giving someone the right to access (then property) that they have a right to, based on some agreement or law.
An assignment contract is a legally binding contract between a trader and an option recipient. It contains all of the terms and conditions of the trade, including how the money received will be spent and whether the option will mature or not. In most cases, assignment contracts are drawn up between two parties who have already established some business or financial relationship. However, some traders may create assignments for individuals, companies, or even institutions without ever having met in person.
Property Rights Assignment
Property assignment is a term used in real estate law to describe the process of transferring ownership or control of certain real estate properties. In simple terms, property assignment involves selling (or delivering) one’s interest in a property to someone interested in acquiring the property. Sometimes, the interest can be bought and sold, as in a contract for sale. Other times, the property can be repossessed (i.e., taken back by the bank if not paid for) if the buyer fails to make payments on the loan or if the seller has defaulted on payments due under the original contract for sale.
In the context of an assignment, all three conditions are satisfied.
The client or team member has the appropriate authority to give instructions and receive responses.
The participant understands the nature and consequences of actions taken; and, if injured, can refuse to participate.
The action taken is consistent with the law (including ethical guidelines).
Option assignment is a mechanism for buyers to allocate available options to the seller without needing a longer representative view on the details of each option. The objective of the options assignment is to make it possible for buyers to buy shares of stock at prices less than those available to ordinary sellers. This can be achieved by selling options on active businesses or industrials in a pooling arrangement with sellers who have otherwise lowered their prices in anticipation of selling. By matching buyers with sellers, option owners achieve an efficiency gain by reducing their response time and reducing costs for buyers looking to buy shares.