Define Assignments

Another example 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.

To be effective, an assignment must contain parties with legal capacity, consideration, consent, and legality of object.

Within the operation of stocks and options trading, options can be assigned when a buyer decides to exercise their right to buy (or sell) stock at a particular strike price.

But there are other types business transactions known as an assignment.

Define Assignments-78Define Assignments-77

Copyright © 2016, 2011 by Houghton Mifflin Harcourt Publishing Company.This concept exists in a variety of business transactions.For investors and traders the most prominent example occurs when an option contract is assigned, the option writer has an obligation to complete the requirements of the contract.The way the options market works, the corresponding seller of the option is not determined when a buyer opens a 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.For example, a person delinquent on 0 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..boxy-content a.term-action, button.term-action a.term-action:hover, button.term-action:hover .term-action-bg .term-uex .term-cite .term-fc .term-edit .boxy-dflt-hder .definition .definition a .definition h2 .example, .highlight-term a.round-btn, a.round-btn.selected:hover a.round-btn:hover, a.round-btn.selected .social-icon a.round-btn .social-icon a.round-btn:hover a.round-btn .fa-facebook a.round-btn .fa-twitter a.round-btn .fa-google-plus .rotate a a.up:hover, selected, a.down:hover, selected, .vote-status .adjacent-term .adjacent-term:hover .adjacent-term .past-tod .past-tod:hover .tod-term .tod-date .tip-content .tooltip-inner .term-tool-action-block .term-link-embed-content .term-fc-options .term-fc-options li .term-fc-options li a .checkmark .quiz-option .quiz-option-bullet .finger-button.quiz-option:hover .definition-number .wd-75 .wd-20 .left-block-terms .left-block-terms .left-block-terms li .no-padding .no-padding-left .no-padding-right .boxy-spacing @media (min-width: 768px) @media (max-width: 768px) @media print { a:link:after, a:visited:after nav, .term-action, #wfi-ad-slot-leaderboard, .wfi-slot, #related-articles, .pop-quiz, #right-block, .An assignment is the transfer of an individual's rights or property to another person or business.The agreement is used to pay a mortgage lender if the landlord defaults on the loan or files bankruptcy.Any rental income would then be paid directly to the lender.

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