The 23-year-old was voted Reading's player of the year last season, but he has struggled to command a regular place in the Premier League campaign.
However, McDermott has challenged the defender to vie for a spot in the team with youngster Sean Morrison.
"We shall see what happens this week. There is a possibility that there will be talks between Alex, his representative and Nick Hammond," McDermott told Sky Sports News.
"Alex has a choice to make and so does his agent. Sean Morrison is now in the team, proved a point and proved he can play at this level.
"He is very much in contention to play because we know he can do it. He's committed and has a three-year deal."
Reading currently occupy 18th spot in the Premier League table.