what is an assignment 
assignment most often refers to one of two definitions in the financial world uses for assignmentsassignment refers to the transfer of some or all property rights and obligations associated with an asset property contract or other asset of value to another entity through a written agreement assignment rights happen every day in many different situations a payee like a utility or a merchant assigns the right to collect payment from a written check to a bank a merchant can assign the funds from a line of credit to a manufacturing third party that makes a product that the merchant will eventually sell a trademark owner can transfer sell or give another person interest in the trademark or logo a homeowner who sells their house assigns the deed to the new buyer to be effective an assignment must involve parties with legal capacity consideration consent and legality of the object examplesa wage assignment is a forced payment of an obligation by automatic withholding from an employee s pay courts issue wage assignments for people late with child or spousal support taxes loans or other obligations money is automatically subtracted from a worker s paycheck without consent if they have a history of nonpayment for example a person delinquent on 100 monthly loan payments has a wage assignment deducting the money from their paycheck and sent to the lender wage assignments are helpful in paying back long term debts another instance can be found in a mortgage assignment this is where a mortgage deed gives a lender interest in a mortgaged property in return for payments received lenders often sell mortgages to third parties such as other lenders a mortgage assignment document clarifies the assignment of contract and instructs the borrower in making future mortgage payments and potentially modifies the mortgage terms a final example involves a lease assignment this benefits a relocating tenant wanting to end a lease early or a landlord looking for rent payments to pay creditors once the new tenant signs the lease taking over responsibility for rent payments and other obligations the previous tenant is released from those responsibilities in a separate lease assignment a landlord agrees to pay a creditor through an assignment of rent due under rental property leases the agreement is used to pay a mortgage lender if the landlord defaults on the loan or files for bankruptcy any rental income would then be paid directly to the lender options assignmentoptions can be assigned when a buyer decides to exercise their right to buy or sell stock at a particular strike price the corresponding seller of the option is not determined when a buyer opens an option trade but only at the time that an option holder decides to exercise their right to buy stock so an option seller with open positions is matched with the exercising buyer via automated lottery the randomly selected seller is then assigned to fulfill the buyer s rights this is known as an option assignment once assigned the writer seller of the option will have the obligation to sell if a call option or buy if a put option the designated number of shares of stock at the agreed upon price the strike price for instance if the writer sold calls they would be obligated to sell the stock and the process is often referred to as having the stock called away for puts the buyer of the option sells stock puts stock shares to the writer in the form of a short sold position suppose a trader owns 100 call options on company abc s stock with a strike price of 10 per share the stock is now trading at 30 and abc is due to pay a dividend shortly as a result the trader exercises the options early and receives 10 000 shares of abc paid at 10 at the same time the other side of the long call the short call is assigned the contract and must deliver the shares to the long 