Assignment risk is where your contracts turn into shares of the underlying asset at expiration. If your options are in the money when the contract expires, your contracts will be turned into shares. This is a risk for most accounts since this can result in needing $50K or more in trading funds in the account needed to cover the cost of 100 shares.
In order to prevent this risk, the Options Auto Trader will do it’s best to prevent this from happening.
By default, the Options Auto Trader will close your position within the last 30 minutes of the market open on the day the contract expires if it is trading in the money. It closes the position in order to prevent assignment risk at expiration.
You can tell this happened with one of your trades if you see the trade exit reason as “Strike Hit” and it closed at the time “15:30 EST” (aka 30 minutes before the market closes).
If you want to allow the trade to expire in the money (typically for the wheel strategy or SPX trades), then you can disable this setting in the auto trader settings popup. The setting is called “Allow The Trade To Expire ITM” and you will select “Yes, Allow Trade To Expire In The Money”.