What is pin risk in options trading?

Pin risk is the uncertainty around whether an option trading very close to its strike price will finish in or out of the money at expiration, which determines whether it gets exercised or assigned. A tiny price move at the close can flip the outcome.

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Should I close this option before expiration to avoid pin risk?

Q: Should I close this option before expiration to avoid pin risk?

Check 8 statements about your strike's distance from the stock price, your broker's exercise cutoff, your ability to cover assignment, and your plan. The tool scores how many apply and returns a Low, Moderate, or High pin risk read.

The traders who last aren't the ones who never lose. They're the ones who never guess.

Jason Parker, Founder of Trading Habits

Check What's True Right Now

Check every statement that's true for this specific position heading into the close on expiration day.

My strike is not within about 1% of the current stock price heading into the final trading day.
I know my broker's exact exercise cutoff time on expiration day, not just a general guess.
If I'm short this option and it gets assigned, I can immediately cover the resulting 100-share-per-contract stock position without a margin call.
I've decided in advance whether I actually want to be assigned here, not just reacting last minute.
I'm watching this position into the close, not walking away and hoping it resolves favorably.
I understand that most brokers auto-exercise options that finish even a penny in the money, regardless of my intent.
If I don't want assignment, I have a specific plan to close or roll this position before the close, not after.
A move of a few cents in either direction right at the close would not meaningfully change my plan or my reaction to it.

Your Result

Check the statements that apply and click Check My Pin Risk to see your result.

How this is calculated

Pin risk describes the uncertainty of whether an option trading very close to its strike price will finish in the money or out of the money at expiration, and therefore whether it will be exercised or assigned.
Even a stock closing a few cents on either side of the strike can flip the outcome, and after-hours price moves can occur after some accounts' exercise decision deadline has already passed.
Each checked box adds one point toward preparedness, out of 8 possible points. 7 to 8 reads as Low Pin Risk, 4 to 6 as Moderate, and 0 to 3 as High.
This is a self-check on your own preparation, not a prediction of which way the stock will close.
Closing or hedging a position ahead of the close removes pin-risk uncertainty entirely, at the cost of the remaining premium or a transaction cost.

Risk & liability disclaimer: This tool is an educational self-check checklist only. It is not financial, investment, or tax advice, and it does not predict whether any specific option position will be assigned or how a stock will close. Trading Habits is not a broker-dealer, registered investment adviser, or tax professional, and is not affiliated with any broker, exchange, or data provider. Always verify results independently and consult a licensed professional before making any trading or financial decision.

Should I close this option before expiration to avoid pin risk?

Check What's True Right Now

Your Result

How this is calculated

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