The notice that tells an option seller to fulfil the contract: deliver shares at the strike for a short call, or buy them at the strike for a short put.
Example
Say you sold a $45 put on a stock for $1.50, and the stock closes at $41 on expiration day. You are assigned and must buy 100 shares at $45, paying $4,500 for shares worth $4,100, a $400 loss on the shares that the $150 premium reduces to $250. With American-style options, assignment can also come before expiration.
Hypothetical numbers, for illustration only.
A flowchart of expiration. Question: in the money by $0.01 or more at the close? Yes leads to automatic exercise, where a long call buys 100 shares at the strike and a long put sells 100 shares at the strike, and the seller is assigned the other side. No leads to expires worthless. A highlighted note says to close or roll before expiration to avoid this.