I sold put options on T1 Energy (TE) between August and October 2026. On 14 Oct 2026, ten of my $4 puts were assigned, two days before they were due to expire on 16 Oct. This post sets out what happened and explains how and why a put can be assigned early.
Read on for the full details.
Quick Verdict
The TE $4 puts were assigned two trading days early, when TE closed at $2.90 and the puts had no time value left. Puts that are this deep in the money are the textbook case for early exercise, so a seller of American-style options should expect it. The shares cost an effective $3.55 each after premium, against a $2.90 market price.
The TE Puts I Sold
| Contract | Sold | Contracts | Strike | Expiry | Premium per share | Net premium | Outcome |
|---|---|---|---|---|---|---|---|
| TE 28AUG26 5 P | 12 Aug 2026 | 2 | $5.00 | 28 Aug 2026 | $0.45 | $88.47 | Bought back 28 Aug at $0.08 |
| TE 04SEP26 4.5 P | 12 Aug 2026 | 2 | $4.50 | 4 Sep 2026 | $0.32 | $64.73 | Bought back 4 Sep at $0.03 |
| TE 04SEP26 5 P | 12 Aug 2026 | 2 | $5.00 | 4 Sep 2026 | $0.55 | $108.49 | Assigned 4 Sep (expiry day) |
| TE 11SEP26 4.5 P | 12 Aug 2026 | 2 | $4.50 | 11 Sep 2026 | $0.37 | $72.51 | Expired worthless |
| TE 11SEP26 5 P | 12 Aug 2026 | 2 | $5.00 | 11 Sep 2026 | $0.62 | $122.49 | Assigned 11 Sep (expiry day) |
| TE 02OCT26 4 P | 22 Sep 2026 | 10 | $4.00 | 2 Oct 2026 | $0.12 | $103.28 | Bought back 1 Oct at $0.343 |
| TE 16OCT26 4 P | 1 Oct 2026 | 10 | $4.00 | 16 Oct 2026 | $0.449 | $445.91 | Assigned 14 Oct (2 days early) |
Net premium is after commission; one contract = 100 shares.
The 2 Oct puts were bought back and the 16 Oct puts were sold at the same timestamp on 1 Oct (10:02:20). Buying back the 2 Oct puts cost $346.08, a realised loss of $242.80 on that series.
Assignment Date vs Expiry Date
| Contract | Expiry | Assigned | Early by | Shares received | Paid at strike | Premium kept | Effective cost per share | TE close on assignment day |
|---|---|---|---|---|---|---|---|---|
| TE 04SEP26 5 P | Fri 4 Sep | Fri 4 Sep | 0 days | 200 | $1,000.00 | $108.49 | $4.46 | $4.60 |
| TE 11SEP26 5 P | Fri 11 Sep | Fri 11 Sep | 0 days | 200 | $1,000.00 | $122.49 | $4.39 | $4.61 |
| TE 16OCT26 4 P | Fri 16 Oct | Wed 14 Oct | 2 trading days | 1,000 | $4,000.00 | $445.91 | $3.55 | $2.90 |
| Total | 1,400 | $6,000.00 | $676.88 | $3.80 |
The two September assignments were ordinary expiry-day assignments: TE closed below $5 on both expiry days. Only the October assignment came before expiry.
The effective cost is the strike less the premium per share, so for the October lot that is $4.00 − $0.4459 = $3.55. If the $242.80 loss on the bought-back 2 Oct puts is counted too, it is $3.80 a share for that lot. The cost basis for all 1,400 shares is $5,323.12, or $3.80 a share. That equals $6,000 less the $676.88 of premium on the assigned puts.
TE’s Price Around the Assignment
| Date | TE close | $4 put intrinsic value |
|---|---|---|
| Thu 8 Oct 2026 | $3.44 | $0.56 |
| Fri 9 Oct 2026 | $3.39 | $0.61 |
| Mon 12 Oct 2026 | $3.21 | $0.79 |
| Tue 13 Oct 2026 | $3.16 | $0.84 |
| Wed 14 Oct 2026 (assigned) | $2.90 | $1.10 |
On 14 Oct the $4 put was marked at $1.10, which is exactly its intrinsic value ($4.00 − $2.90). So the put had no time value left. Holding it until Friday offered nothing extra over exercising, apart from the chance of TE rising back above $4 in two days.
How Early Assignment Works
American-style options can be exercised on any business day. US equity options such as TE’s are American-style. The holder “has the right to exercise their options position prior to expiration regardless of whether the options are in- or out-of-the-money” (OIC). FINRA adds that this can happen “on any day equity markets are open” (FINRA).
Assignment is random, through OCC and then the broker. When a holder exercises, OCC “randomly assigns the short position of the exercised option contract” to a clearing member firm (OCC). That firm then allocates it to a customer who is short the same series. FINRA requires firms to use first-in, first-out, random selection or another approved random method (FINRA). As a seller, you don’t know who exercised or why.
Deep in-the-money puts with little time value are the usual candidates. The OIC notes that “when puts become deep in-the-money, most professional option traders exercise before expiration” (OIC). Exercising gives up any remaining time value, so it rarely makes sense while there is time value left (Investopedia). Once a put trades at its intrinsic value, as the TE $4 put did on 14 Oct, nothing is lost by exercising.
The interest (carry) reason. Exercising a put means selling the shares at the strike price and receiving cash straight away. Investopedia explains that a put becomes an early-exercise candidate when “the interest that could be earned on the proceeds from the sale of the stock at the strike price is large enough” (Investopedia). Calls are different: early exercise of a call is mainly about capturing a dividend.
| Illustration | Value |
|---|---|
| Cash from exercising 10 TE $4 puts | $4,000 |
| Days earlier than expiry | 2 |
| Interest per 1% a year on that cash | $0.22 |
On a $4 stock held for two days the interest is small, so the zero time value is the bigger factor here. Other costs such as borrowing fees can matter for holders who are short the stock, but there is no information about the exerciser.
The Risk Side: Assigned Into a Falling Stock
| TE 16 Oct $4 put lot | Value |
|---|---|
| TE close on 21 Sep 2026 | $4.45 |
| TE close on 14 Oct 2026 | $2.90 |
| Fall | −34.8% |
| Effective cost of 1,000 shares after premium | $3,554.09 |
| Market value on 14 Oct | $2,900.00 |
| Paper loss on this lot | −$654.09 |
| Paper loss incl. the 2 Oct put buy-back | −$896.89 |
Selling a put is a commitment to buy at the strike however far the stock falls. The premium only cushions the first part of the fall: $0.45 a share against a $1.10 drop below the strike. Early assignment does not change the loss compared with assignment at expiry. It only changes when the shares and the cash obligation arrive. Across all 1,400 TE shares, the unrealised loss is −$1,263.12 on 14 Oct (value $4,060.00 against $5,323.12 cost).
Tax: Withholding and Estate Tax
TE is a US-listed company, so for us in Singapore any dividends would be subject to 30% US withholding tax, and the shares count as a US asset for US estate tax (IRS). TE paid no dividends to me in 2026.
Conclusion
The TE $4 puts were assigned on 14 Oct, two trading days before the 16 Oct expiry. TE closed at $2.90 that day, and the put’s price equalled its intrinsic value. American-style options can be exercised on any business day, OCC and the broker allocate assignments at random, and deep in-the-money puts with no time value are the most likely to be exercised early. The 1,000 shares came in at an effective $3.55 each after premium, compared with a $2.90 market price.
Related
As always, remember that Past Performance is No Guarantee of Future Results. And none of the content that I write on this site should be taken as financial advice.
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