A quick look at the MLB transaction wire on just about any day will reveal players being optioned from the major league club to the minors. Here are the in’s and out’s of the system in regard to options.
Once a player is added to his club’s 40-man roster, the club has three seasons to send him back and forth between the majors and the minors without exposing him to the other clubs via the Rule 5 Draft. During these three seasons, the player can be optioned down and brought back up an unlimited number of times. Each year counts as “1”, not each option.
Minor leaguers that are on the major league club’s 40-man roster are on an “optional assignment,” thus the wide use of the term “options” to decribe the transaction.
After the player’s three option years are used up, he is said to be “out of options” and if he is sent to the minors again, he must clear waivers before he can be sent back down. In the waivers process, the other clubs are given the chance to claim the player in reverse-order of their records until the player is either claimed or each team has had a chance and passed.
If the player is claimed, the original club may withdraw the waiver request, but if it doesn’t, the player is assigned to the claiming club.
If the player is not claimed, he can report to the minor league assignment or he may become a free agent if he is released by the club.