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Short Straddles
Analyzing the risk profile of a short straddle
What Happens At Expiration?
If the Share Price Lands Below the Strike
If the share price lands below your strike, the call will expire worthless and the put will expire ITM. You will be 100 at the strike price. As long as the share price is within the green zone (meaning the spread holds less intrinsic value than the credit we originally sold it for), the trade is profitable.
If the Share Price Lands Above the Strike
If the share price lands above the strike, the put will expire worthless and the call will expire ITM. You will be assigned 100 at the strike price. As long as the share price is in the green zone, the trade is profitable.
If the Share Price Lands Exactly at the Strike
It the share price lands exactly on the strike (called pinning the strike), neither option will contain any intrinsic value and both will expire worthless. The trade will be a max winner! The odds of this happening, however, are almost 0. This has never happened to me so I don't know the true risk of assignment in this situation. I don't believe you'd be assigned any shares, but who knows what complications might arise.
Avoiding the Hassle
In each of these situations, I'd much rather avoid the risk of assignment altogether and close the position before it expires. If you let it expire and are assigned shares, you risk losing money the next trading day. If you want to avoid that risk, just close it and move on.