Pin Risk

Pin risk is the danger of a stock closing exactly at, or within pennies of, a strike price at expiration — leaving option writers unsure whether their contracts will be assigned. A call writer at the 100 strike with the stock closing at $100.02 may or may not be assigned overnight, and either outcome leaves an unhedged share position Monday morning.

The word also names the broader expiration-day phenomenon: prices seeming to gravitate to (pin at) strikes carrying heavy open interest, plausibly from dealers unwinding hedges. That clustering is documented in academic work; whether it reliably lands at any particular strike, such as the max pain price, is contested.