Quick definition
Assignment on an American-style option before expiration. Early assignment is rare but real and is driven almost entirely by dividends, deep ITM parity, and hard-to-borrow situations.
The dividend case
The most common early-assignment trigger is an impending ex-dividend date on a short ITM call. If the dividend exceeds the remaining extrinsic value of the call, exercising the day before ex-dividend captures the dividend and is rational. Short call sellers holding ITM contracts into a dividend event should assume assignment risk and act accordingly.
Deep ITM puts and hard-to-borrow
Deep ITM puts with minimal extrinsic can also be exercised early, particularly on hard-to-borrow underlyings where the short-stock leg of exercise provides value. This is much rarer than the dividend case but appears in special-situation names — earnings arbitrage, borrow squeezes, corporate actions.
How Treeova uses it
Treeova pre-flags any short ITM position going into ex-dividend and any deep-ITM put with negligible extrinsic. The agent sees the risk as a first-class alert, not a surprise. Post-assignment reconciliation is automatic — the agent's ledger and cockpit reflect the resulting stock position within seconds of the broker fill.