Pin Risk (Options Expiration)

Pin risk happens when an option's strike price is very close to the stock’s market price at expiration; or right at the money (ATM). This creates uncertainty for both option buyers and sellers, because it’s unclear due to the proximity to the underlying whether the option will be exercised or expire worthless. For option sellers, this can be risky—especially if they have a short position—since unexpected exercise could lead to unwanted stock assignments after the market closes. For example, if $SPY is trading at $610 per share, and a trader is short the $610 call near expiration, the trader experiences pin risk because it's unclear whether $SPY will close above or below $610 per share